I 
116TH CONGRESS 
2D SESSION 
H. R. 7825 
To amend the Internal Revenue Code of 1986 to create increased opportuni-
ties for savings to HSA, MSA, and FSA plans, to mitigate the financial 
strain on families caused by COVID–19, to provide for child nutrition, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 29, 2020 
Mr. BUCK introduced the following bill; which was referred to the Committee 
on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to create 
increased opportunities for savings to HSA, MSA, and 
FSA plans, to mitigate the financial strain on families 
caused by COVID–19, to provide for child nutrition, 
and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Pandemic Eradication 
and Enhanced Prevention through Savings Act’’ or the 
‘‘PEEPS Act’’. 
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SEC. 2. MODIFICATIONS OF HSAS, ARCHER MSAS, AND 
FSAS. 
(a) COBRA COVERAGE.— 
(1) HSA.—Section 223(d)(2) of the Internal 
Revenue Code of 1986 is amended by adding at the 
end the following: 
‘‘(E) COBRA COVERAGE.—Subparagraph 
(B) shall not apply to amounts paid during cal-
endar year 2020 for premiums for coverage 
under a group health plan pursuant to section 
4980B(f).’’. 
(2) FSA.—Section 106 of such Code is amend-
ed by adding at the end the following: 
‘‘(h) FSA PAYMENTS FOR COBRA COVERAGE.—A 
plan shall not fail to be treated as a health flexible spend-
ing arrangement under this section merely because such 
plan provides for a distribution during calendar year 2020 
to make payments for premiums for coverage under a 
group health plan pursuant to section 4980B(f).’’. 
(b) HEALTH INSURANCE PREMIUMS
FOR THOSE 
NOT
COVERED
BY
EMPLOYER-SPONSORED
HEALTH 
PLAN DURING 2020.— 
(1) HSA.—Section 223(d)(2) of such Code, as 
amended by subsection (a), is amended by adding at 
the end the following: 
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‘‘(ii) does not include coverage for 
abortions (other than any abortion nec-
essary to save the life of the mother or any 
abortion with respect to a pregnancy that 
is the result of an act of rape or incest).’’. 
(3) FSA.—Section 106 of such Code, as 
amended by subsection (a), is amended by adding at 
the end the following: 
‘‘(i) HEALTH INSURANCE PREMIUMS
FOR THOSE 
NOT ELIGIBLE FOR EMPLOYER-SPONSORED COVERAGE 
IN 2020 AND 2021.—A plan shall not fail to be treated 
as a health flexible spending arrangement under this sec-
tion merely because such plan provides for a distribution 
during calendar year 2020 or 2021 for premiums for cov-
erage for medical expenses under an accident or health 
plan of a plan beneficiary if the beneficiary is not eligible 
for coverage by an employer-sponsored health plan. The 
preceding sentence shall only apply if the coverage does 
not include coverage for abortions (other than any abor-
tion necessary to save the life of the mother or any abor-
tion with respect to a pregnancy that is the result of an 
act of rape or incest).’’. 
(c) HSAS WITHOUT HIGH DEDUCTIBLE HEALTH 
PLANS FOR 2020 AND 2021.—Section 223 of such Code 
is amended by adding at the end the following: 
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‘‘(i) SPECIAL RULE FOR CALENDAR YEARS 2020 
AND 2021.— 
‘‘(1) IN GENERAL.—Notwithstanding subsection 
(c)(1)(A) and subject to paragraph (2), for calendar 
years 2020 and 2021, the term ‘eligible individual’ 
means, with respect to any month, any individual if 
the individual is covered under any health plan, in-
cluding any the following: 
‘‘(A) 
GOVERNMENT
SPONSORED
PRO-
GRAMS.—Coverage under— 
‘‘(i) The Medicare program under 
part A of title XVIII of the Social Security 
Act. 
‘‘(ii) The Medicaid program under 
title XIX of the Social Security Act. 
‘‘(iii) The CHIP program under title 
XXI of the Social Security Act or under a 
qualified CHIP look-alike program (as de-
fined in section 2107(g) of the Social Secu-
rity Act). 
‘‘(iv) Medical coverage under chapter 
55 of title 10, United States Code, includ-
ing coverage under the TRICARE pro-
gram. 
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‘‘(v) A health care program under 
chapter 17 or 18 of title 38, United States 
Code, as determined by the Secretary of 
Veterans Affairs, in coordination with the 
Secretary of Health and Human Services 
and the Secretary. 
‘‘(vi) A health plan under section 
2504(e) of title 22, United States Code 
(relating to Peace Corps volunteers). 
‘‘(vii) The Non-appropriated Fund 
Health Benefits Program of the Depart-
ment of Defense, established under section 
349 of the National Defense Authorization 
Act for Fiscal Year 1995 (Public Law 
103–337; 10 U.S.C. 1587 note). 
‘‘(B) EMPLOYER-SPONSORED PLAN.—Cov-
erage under an eligible employer-sponsored 
plan. 
‘‘(C) PLANS
IN
THE
INDIVIDUAL
MAR-
KET.—Coverage under a health plan offered in 
the individual market within a State. 
‘‘(D) GRANDFATHERED HEALTH PLAN.— 
Coverage under a grandfathered health plan. 
‘‘(E) COVERAGE.—Such other health bene-
fits coverage, such as a State health benefits 
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risk pool, as the Secretary of Health and 
Human Services, in coordination with the Sec-
retary, recognizes for purposes of this sub-
section. 
‘‘(2) MODIFICATIONS.—For purposes of para-
graph (1), subsection (b)(8) shall be applied by sub-
stituting ‘health plan’ for ‘high deductible health 
plan’ each place it appears and subsection (c)(1)(B) 
shall not apply.’’. 
(d) WAIVER OF CARRYOVER LIMITATION ON FSA 
2020 FUNDS.—Section 106 of such Code, as amended by 
the preceding provisions of this section, is amended by 
adding at the end the following: 
‘‘(j) FSA CARRYOVER WITHOUT LIMITATION
ON 
2020 CONTRIBUTIONS.—There shall be no limitation on 
the amount of funds contributed during 2020 to a health 
flexible spending arrangement under this section that may 
be carried over to the succeeding plan year.’’. 
(e) PREMIUM FOR BENEFITS UNDER MEDICARE FOR 
2020.— 
(1) HSA.—Section 223(d)(2) of such Code, as 
amended by the preceding provisions of this section, 
is amended by adding at the end the following: 
‘‘(G) PREMIUMS
FOR
BENEFITS
UNDER 
MEDICARE FOR 2020.—Subparagraph (B) shall 
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not apply to amounts paid during calendar year 
2020 for any monthly premium for benefits 
under part A of title XVIII of the Social Secu-
rity Act, any monthly premium for benefits 
under part B of such title, any monthly pre-
mium under a Medicare Advantage plan under 
part C of such title, or any monthly premium 
under a prescription drug plan under part D of 
such title.’’. 
(2) ARCHER MSA.—Section 220(d)(2) of such 
Code, as amended by the preceding provisions of this 
section, is amended by adding at the end the fol-
lowing: 
‘‘(F) PREMIUMS
FOR
BENEFITS
UNDER 
MEDICARE FOR 2020.—Subparagraph (B) shall 
not apply to amounts paid during calendar year 
2020 for any monthly premium for benefits 
under part A of title XVIII of the Social Secu-
rity Act, any monthly premium for benefits 
under part B of such title, any monthly pre-
mium under a Medicare Advantage plan under 
part C of such title, or any monthly premium 
under a prescription drug plan under part D of 
such title.’’. 
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(3) FSA.—Section 106 of such Code, as 
amended by the preceding provisions of this section, 
is amended by adding at the end the following: 
‘‘(k) FSA PAYMENTS FOR BENEFITS UNDER MEDI-
CARE FOR 2020.—A plan shall not fail to be treated as 
a health flexible spending arrangement under this section 
merely because such plan provides for a distribution dur-
ing calendar year 2020 for any monthly premium for bene-
fits under part A of title XVIII of the Social Security Act, 
any monthly premium for benefits under part B of such 
title, any monthly premium under a Medicare Advantage 
plan under part C of such title, or any monthly premium 
under a prescription drug plan under part D of such 
title.’’. 
(f) PAYMENT OF NON-DEPENDENT MEDICAL EX-
PENSES IN 2020.— 
(1) HSA.— 
(A) 
MEDICAL
EXPENSES.—Section 
223(d)(2) of such Code, as amended by the pre-
ceding provisions of this section, is amended by 
adding at the end the following: 
‘‘(F) 
NON-DEPENDENT
MEDICAL
EX-
PENSES IN 2020.—During calendar year 2020, 
subparagraph (A) shall be applied without re-
gard to the requirement that medical care be 
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beneficiary receives the payment or dis-
tribution, and 
‘‘(ii) the aggregate amount of such 
transfers to all other individuals does not 
exceed $2,020 in 2020.’’. 
(C) DONATIONS TO QUALIFIED CHARITY.— 
Section 223(f) of such Code is amended by add-
ing at the end the following: 
‘‘(9) DONATIONS TO QUALIFIED CHARITY.— 
‘‘(A) 
DONATIONS
ALLOWABLE.—Para-
graph (2) shall not apply to any amount paid 
or distributed from a health savings account to 
the extent the amount (not to exceed $10,000) 
is a qualified charitable contribution made by 
the account beneficiary during the taxable year. 
‘‘(B) QUALIFIED CHARITABLE CONTRIBU-
TION.—For purposes of subparagraph (A), the 
term ‘qualified charitable contribution’ means a 
charitable contribution (as defined in section 
170(c))— 
‘‘(i) which is made in cash, 
‘‘(ii) for which a deduction is allow-
able under section 170 (determined with-
out regard to subsection (b) thereof and to 
subparagraph (C) of this paragraph), and 
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‘‘(iii) which is— 
‘‘(I) made to an organization de-
scribed in section 170(b)(1)(A), and 
‘‘(II) not— 
‘‘(aa) to an organization de-
scribed in section 509(a)(3), or 
‘‘(bb) for the establishment 
of a new, or maintenance of an 
existing, donor advised fund (as 
defined in section 4966(d)(2)). 
‘‘(C) DENIAL OF DEDUCTION.—No deduc-
tion shall be allowed for a distribution which is 
a contribution made pursuant to this para-
graph.’’. 
(2) ARCHER MSA.— 
(A) NON-DEPENDENT MEDICAL EXPENSES 
IN 2020.—Section 220(d)(2) of such Code, as 
amended by the preceding provisions of this 
section, is amended by adding at the end the 
following: 
‘‘(E) 
NON-DEPENDENT
MEDICAL
EX-
PENSES IN 2020.—During calendar year 2020, 
subparagraph (A) shall be applied without re-
gard to the requirement that medical care be 
for the individual, the spouse of such individual, 
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and any dependent (as defined in section 152, 
determined 
without 
regard 
to 
subsections 
(b)(1), (b)(2), and (d)(1)(B) thereof) of such 
individual.’’. 
(B) ROLLOVER.—Section 220(f)(5) of such 
Code is amended by adding at the end the fol-
lowing: 
‘‘(C) ROLLOVER GIFTS.—Notwithstanding 
the preceding provisions of this paragraph, an 
amount is described in this paragraph as a roll-
over contribution in the case of a taxable year 
beginning in 2020 and paragraph (2) shall not 
apply to any amount paid or distributed from 
a health savings account of a beneficiary to a 
health savings account of an individual who is 
not such beneficiary, the spouse of such bene-
ficiary, or any dependent (as defined in section 
152, determined without regard to subsections 
(b)(1), (b)(2), and (d)(1)(B) thereof) of such 
beneficiary, to the extent— 
‘‘(i) the amount received is paid into 
the health savings account for the benefit 
of such individual not later than the 60th 
day after the day on which the account 
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beneficiary receives the payment or dis-
tribution, and 
‘‘(ii) the aggregate amount of such 
transfers to all other individuals does not 
exceed $2,020 in 2020.’’. 
(C) DONATIONS TO QUALIFIED CHARITY.— 
Section 220(f) of such Code is amended by add-
ing at the end the following: 
‘‘(9) DONATIONS TO QUALIFIED CHARITY.— 
‘‘(A) 
DONATIONS
ALLOWABLE.—Para-
graph (2) shall not apply to any amount paid 
or distributed from a health savings account to 
the extent the amount (not to exceed $10,000) 
is a qualified charitable contribution made by 
the account beneficiary during the taxable year. 
‘‘(B) QUALIFIED CHARITABLE CONTRIBU-
TION.—For purposes of subparagraph (A), the 
term ‘qualified charitable contribution’ means a 
charitable contribution (as defined in section 
170(c))— 
‘‘(i) which is made in cash, 
‘‘(ii) for which a deduction is allow-
able under section 170 (determined with-
out regard to subsection (b) thereof and to 
subparagraph (C) of this paragraph), and 
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‘‘(iii) which is— 
‘‘(I) made to an organization de-
scribed in section 170(b)(1)(A), and 
‘‘(II) not— 
‘‘(aa) to an organization de-
scribed in section 509(a)(3), or 
‘‘(bb) for the establishment 
of a new, or maintenance of an 
existing, donor advised fund (as 
defined in section 4966(d)(2)). 
‘‘(C) DENIAL OF DEDUCTION.—No deduc-
tion shall be allowed for a distribution which is 
a contribution made pursuant to this para-
graph.’’. 
(g) CAFETERIA PLANS.—Section 125 of such Code 
is amended by redesignating subsections (k) and (l) as 
subsections (l) and (m), respectively, and by inserting 
after subsection (j) the following new subsection: 
‘‘(k) ADDITIONAL EMPLOYER CONTRIBUTIONS.— 
‘‘(1) IN GENERAL.—A plan shall not fail to be 
treated as a cafeteria plan under this section merely 
because the employer makes contributions to em-
ployee health savings accounts during plan years be-
ginning in 2020 or 2021 without regard to choices 
made by participants. 
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‘‘(2) APPLICABLE
RULES.—For purposes of 
paragraph (1)— 
‘‘(A) subsections (b) and (c) shall apply 
with respect to such contributions, 
‘‘(B) the dollar limitation in subsection 
(i)(1) shall not apply with respect to such con-
tributions, and 
‘‘(C) in the case of an eligible employer (as 
defined in subsection (j)(5)), the requirements 
of subsection (j) shall apply, except that such 
contributions shall be treated as in addition to 
contributions 
required 
under 
subsection 
(j)(3)(A).’’. 
(h) EXPANSION OF ALLOWABLE MEDICAL EXPENSES 
FOR 2020.— 
(1) HSA.—Section 223(d)(2) of such Code, as 
amended by the preceding provisions of this section, 
is amended by adding at the end the following: 
‘‘(H) ADDITIONAL
ALLOWABLE
MEDICAL 
EXPENSES FOR 2020.—For calendar year 2020, 
amounts paid for masks, testing supplies, pain 
relievers and fever reducing OTC products, and 
for child nutrition shall be treated as paid for 
medical care.’’. 
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tion under subsection (a) shall be 120 percent of the 
amount allowed as a deduction under subsection (a) 
without regard to this paragraph.’’. 
(2) ARCHER
MSA.—Section 220(b) of such 
Code is amended by adding at the end the following: 
‘‘(8) INCREASE IN CONTRIBUTION LIMITS FOR 
2020.—In the case of any taxable year beginning in 
calendar year 2020, the amount allowed as a deduc-
tion under subsection (a) shall be 120 percent of the 
amount allowed as a deduction under subsection (a) 
without regard to this paragraph.’’. 
(j) INCREASE HSA AND MSA CONTRIBUTION LIMITS 
FOR BENEFICIARIES HOSPITALIZED OR TESTING POSI-
TIVE FOR COVID–19.— 
(1) HSA.—Section 223(b) of such Code, as 
amended by the preceding provisions of this section, 
is amended by adding at the end the following: 
‘‘(10) INCREASE IN CONTRIBUTION LIMITS HOS-
PITALIZED OR TESTING POSITIVE FOR COVID–19.— 
In the case of any taxable year beginning in cal-
endar year 2020 or 2021 in which the account bene-
ficiary or any individual described in paragraph 
(2)(A) is hospitalized or tests positive for COVID– 
19, the amount allowed as a deduction under sub-
section (a) shall, be 300 percent of the amount al-
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lowed as a deduction under subsection (a) without 
regard to this paragraph and paragraph (9).’’. 
(2) ARCHER
MSA.—Section 220(b) of such 
Code is amended by adding at the end the following: 
‘‘(9) INCREASE IN CONTRIBUTION LIMITS FOR 
BENEFICIARIES
HOSPITALIZED
OR
TESTING
POSI-
TIVE FOR COVID–19.—In the case of any taxable 
year beginning in calendar year 2020 or 2021 in 
which the account beneficiary or any individual de-
scribed in paragraph (2)(A) is hospitalized or tests 
positive for COVID–19, the amount allowed as a de-
duction under subsection (a) shall, be 300 percent of 
the amount allowed as a deduction under subsection 
(a) without regard to this paragraph and paragraph 
(8).’’. 
(k) EFFECTIVE DATE.—The amendments made by 
this Act shall apply to years ending after the date of the 
enactment of this Act. 
SEC. 3. DISALLOWANCE OF COSTS FOR ABORTION. 
(a) HSA.—Paragraph (2) of section 223(d) of the In-
ternal Revenue Code of 1986, as amended by the pre-
ceding provisions of this Act, is amended by adding at the 
end the following new subparagraph: 
‘‘(I) DISALLOWANCE OF COSTS FOR ABOR-
TION.—Such term shall not include any 
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amounts paid for any abortion or premiums of 
any health insurance that includes coverage of 
abortion, other than— 
‘‘(i) in the case of a physical disorder, 
physical injury, or physical illness which 
would, as certified by a physician, place 
the pregnant individual in danger of death 
unless an abortion is performed, including 
a 
life-endangering 
physical 
condition 
caused by or arising from the pregnancy 
itself, and 
‘‘(ii) in the case of a pregnancy result-
ing from an act of rape or incest.’’. 
(b) ARCHER MSA.—Paragraph (2) of section 220(d) 
of such, as amended by the preceding provisions of this 
Act, is amended by adding at the end the following new 
subparagraph: 
‘‘(H) DISALLOWANCE
OF
COSTS
FOR 
ABORTION.—Such term shall not include any 
amounts paid for any abortion or premiums of 
any health insurance that includes coverage of 
abortion, other than— 
‘‘(i) in the case of a physical disorder, 
physical injury, or physical illness which 
would, as certified by a physician, place 
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the pregnant individual in danger of death 
unless an abortion is performed, including 
a 
life-endangering 
physical 
condition 
caused by or arising from the pregnancy 
itself, and 
‘‘(ii) in the case of a pregnancy result-
ing from an act of rape or incest.’’. 
(c) FSA.—Section 106 of such Code, as amended by 
the preceding provisions of this section, is amended by 
adding at the end the following: 
‘‘(l) DISALLOWANCE OF COSTS FOR ABORTION.—A 
plan shall not be treated as a health flexible spending ar-
rangement under this section if such plan provides for any 
reimbursement of amounts paid for any abortion or pre-
miums of any health insurance that includes coverage of 
abortion, other than— 
‘‘(1) in the case of a physical disorder, physical 
injury, or physical illness which would, as certified 
by a physician, place the pregnant individual in dan-
ger of death unless an abortion is performed, includ-
ing a life-endangering physical condition caused by 
or arising from the pregnancy itself, and 
‘‘(2) in the case of a pregnancy resulting from 
an act of rape or incest.’’. 
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(d) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2020. 
Æ 
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