IB 
Union Calendar No. 89
108TH CONGRESS 
1ST SESSION H. R. 2351
[Report No. 108–177] 
To amend the Internal Revenue Code of 1986 to allow a deduction to 
individuals for amounts contributed to health savings accounts and to 
provide for the disposition of unused health benefits in cafeteria plans 
and flexible spending arrangements. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 5, 2003
Mr. THOMAS (for himself, Mr. LIPINSKI, Mrs. JOHNSON of Connecticut, Mr. 
SAM JOHNSON of Texas, Mr. HAYWORTH, Mr. LEWIS of Kentucky, Mr. 
BRADY of Texas, Mr. ENGLISH, Mr. SESSIONS, Mr. OSE, Mr. FOSSELLA, 
Mr. PAUL, Mr. SMITH of New Jersey, Mr. WELDON of Florida, Mr. 
RYUN of Kansas, Mr. DELAY, Mr. TOOMEY, Mr. BARTON of Texas, Mr. 
WALSH, Mr. BALLENGER, Mr. CAMP, Mr. COLLINS, Mr. RYAN of Wis-
consin, Mr. KELLER, Mr. HERGER, Mr. DOOLITTLE, Mr. DEMINT, and 
Mr. NORWOOD) introduced the following bill; which was referred to the 
Committee on Ways and Means 
JUNE 25, 2003
Additional sponsors: Mr. BURTON of Indiana, Ms. HART, Mr. GREENWOOD, 
Mr. KOLBE, Mr. SENSENBRENNER, Mr. GUTKNECHT, Mr. SHAYS, Mr. 
LATOURETTE, Mr. AKIN, Mr. LINDER, Mr. UPTON, Mr. PORTMAN, Mr. 
KENNEDY of Minnesota, Mr. LUCAS of Kentucky, Mr. RAMSTAD, Mr. 
HALL, Mr. KING of Iowa, Mr. JONES of North Carolina, Mr. PETERSON 
of Minnesota, Mr. DEUTSCH, Mr. NETHERCUTT, Mr. CANNON, Mrs. 
KELLY, Mr. ROYCE, and Mr. BARRETT of South Carolina 
JUNE 25, 2003 
Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in italic] 
[For text of introduced bill, see copy of bill as introduced on June 5, 2003] 
A BILL 
To amend the Internal Revenue Code of 1986 to allow a 
deduction to individuals for amounts contributed to 
health savings accounts and to provide for the disposition 
of unused health benefits in cafeteria plans and flexible 
spending arrangements.
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 ‘‘Health Savings Account 
Availability Act’’. 
SEC. 2. HEALTH SAVINGS ACCOUNTS. 
(a) IN GENERAL.—Part VII of subchapter B of chapter 
1 of the Internal Revenue Code of 1986 (relating to addi-
tional itemized deductions for individuals) is amended by 
redesignating section 223 as section 224 and by inserting 
after section 222 the following new section: 
‘‘SEC. 223. HEALTH SAVINGS ACCOUNTS. 
‘‘(a) DEDUCTION ALLOWED.—In the case of an indi-
vidual who is an eligible individual for any month during 
the taxable year, there shall be allowed as a deduction for 
the taxable year an amount equal to the aggregate amount
paid in cash during such taxable year by such individual 
to a health savings account of such individual. 
‘‘(b) LIMITATIONS.—
‘‘(1) IN GENERAL.—The amount allowable as a 
deduction under subsection (a) to an individual for 
the taxable year shall not exceed the sum of the 
monthly limitations for months during such taxable 
year that the individual is an eligible individual. 
‘‘(2) MONTHLY LIMITATION.—The monthly limi-
tation for any month is 1⁄12 of—
‘‘(A) $2,000, in the case of an eligible indi-
vidual who—
‘‘(i) has self-only coverage under a 
minimum deductible plan as of the first 
day of such month, or 
‘‘(ii) is uninsured as of the first day of 
such month and is not described in sub-
paragraph (B)(ii) with respect to the tax-
able year which includes such month, 
‘‘(B) $4,000, in the case of an eligible indi-
vidual who—
‘‘(i) has family coverage under a min-
imum deductible plan as of the first day of 
such month, or
‘‘(ii) is uninsured as of the first day of 
such month and, with respect to the taxable 
year which includes such month— 
‘‘(I) is entitled to a deduction for 
a dependent under section 151(c) (or 
would be so entitled but for paragraph 
(2) or (4) of section 152(e)), or 
‘‘(II) files a joint return, and 
‘‘(C) zero in any other case. 
‘‘(3) ADDITIONAL CONTRIBUTIONS FOR INDIVID-
UALS 55 OR OLDER.—
‘‘(A) IN GENERAL.—In the case of an indi-
vidual who has attained the age of 55 before the 
close of the taxable year, paragraph (2) shall be 
applied by increasing the $2,000 amount in 
paragraph (2)(A) and the $4,000 amount in 
paragraph (2)(B) by the additional contribution 
amount. 
‘‘(B) 
ADDITIONAL
CONTRIBUTION 
AMOUNT.—For purposes of this section, the addi-
tional contribution amount is the amount deter-
mined in accordance with the following table:
‘‘For taxable years 
The additional 
beginning in: 
contribution amount is: 
2004 ................................................................................................
$500
2005 ................................................................................................
$600
2006 ................................................................................................
$700
2007 ................................................................................................
$800
‘‘For taxable years 
The additional 
beginning in: 
contribution amount is: 
2008 ................................................................................................
$900
2009 and thereafter ........................................................................
$1,000.
‘‘(4) LIMITATION BASED ON ADJUSTED GROSS IN-
COME.—
‘‘(A) IN GENERAL.—The dollar amount in 
paragraph (2)(A) and the dollar amount in 
paragraph (2)(B) (in each case as increased 
under paragraph (3)) shall each be reduced (but 
not below zero) by an amount which bears the 
same ratio to such dollar amount as—
‘‘(i) the excess of—
‘‘(I) the taxpayer’s adjusted gross 
income for such taxable year, over 
‘‘(II) 
the 
applicable 
dollar 
amount, bears to 
‘‘(ii) $10,000 ($20,000 in the case of a 
joint return for a taxable year beginning 
after December 31, 2006). 
‘‘(B) NO
REDUCTION
BELOW
$200
UNTIL 
COMPLETE PHASE-OUT.—No dollar amount shall 
be reduced below $200 under subparagraph (A) 
unless (without regard to this subparagraph) 
such limitation is reduced to zero.
‘‘(C) ROUNDING.—Any amount determined 
under this paragraph which is not a multiple of 
$10 shall be rounded to the next lowest $10. 
‘‘(D) ADJUSTED GROSS INCOME.—For pur-
poses of this paragraph, adjusted gross income 
shall be determined—
‘‘(i) without regard to this section or 
section 911, and 
‘‘(ii) after application of sections 86, 
135, 137, 219, 221, 222, and 469. 
‘‘(E) APPLICABLE
DOLLAR
AMOUNT.—For 
purposes of this paragraph, the term ‘applicable 
dollar amount’ has the meaning given such term 
in section 219(g)(3)(B). The rule of section 
219(g)(4) (relating to special rule for married 
individuals filing separately and living apart) 
shall apply for purposes of the preceding sen-
tence. 
‘‘(5) COORDINATION
WITH
OTHER
CONTRIBU-
TIONS.—The limitation which would (but for this 
paragraph) apply under this subsection to the tax-
payer for any taxable year shall be reduced (but not 
below zero) by the sum of—
‘‘(A) the aggregate amount which would 
(but for section 125(h)(1)(B) and subsections (b)
and (d) of section 106) be includible in the tax-
payer’s gross income for such taxable year, and 
‘‘(B) the aggregate amount paid during 
such taxable year by such individual to Archer 
MSAs of such individual. 
‘‘(6) SPECIAL RULES FOR MARRIED INDIVIDUALS, 
DEPENDENTS, 
AND
MEDICARE
ELIGIBLE
INDIVID-
UALS.—Rules similar to the rules of paragraphs (3), 
(6), and (7) of section 220(b) shall apply for purposes 
of this section. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) ELIGIBLE INDIVIDUAL.— 
‘‘(A) IN GENERAL.—The term ‘eligible indi-
vidual’ means, with respect to any month, any 
individual unless such individual is covered, as 
of the first day of such month, under any health 
plan which is not a minimum deductible plan. 
‘‘(B) CERTAIN COVERAGE DISREGARDED.—
Subparagraph (A) shall be applied without re-
gard to— 
‘‘(i) coverage for any benefit provided 
by permitted insurance, and 
‘‘(ii) coverage (whether through insur-
ance or otherwise) for accidents, disability, 
dental care, vision care, or long-term care.
‘‘(2) MINIMUM DEDUCTIBLE PLAN.—
‘‘(A) IN
GENERAL.—The term ‘minimum 
deductible plan’ means a health plan— 
‘‘(i) in the case of self-only coverage, 
which has an annual deductible which is 
not less than $500, and 
‘‘(ii) in the case of family coverage, 
which has an annual deductible which is 
not less than twice the dollar amount in 
clause (i) (as increased under subparagraph 
(B)). 
‘‘(B) COST-OF-LIVING ADJUSTMENT FOR AN-
NUAL DEDUCTIBLES.—
‘‘(i) IN GENERAL.—In the case of any 
taxable year beginning in a calendar year 
after 2004, the $500 amount in subpara-
graph (A)(i) shall be increased by an 
amount equal to—
‘‘(I) such dollar amount, multi-
plied by 
‘‘(II) the cost-of-living adjustment 
determined under section 1(f)(3) for 
the calendar year in which such tax-
able year begins by substituting ‘cal-
endar year 2003’ for ‘calendar year 
1992’ in subparagraph (B) thereof. 
‘‘(ii) 
ROUNDING.—If 
any 
increase 
under clause (i) is not a multiple of $50, 
such increase shall be rounded to the nearest 
multiple of $50. 
‘‘(C) SPECIAL RULES.— 
‘‘(i) EXCLUSION OF CERTAIN PLANS.—
Such term does not include a health plan if 
substantially all of its coverage is coverage 
described in paragraph (1)(B).
‘‘(ii) SAFE HARBOR FOR ABSENCE OF 
PREVENTIVE
CARE
DEDUCTIBLE.—A plan 
shall not fail to be treated as a minimum 
deductible plan by reason of failing to have 
a deductible for preventive care. 
‘‘(3) PERMITTED
INSURANCE.—The term ‘per-
mitted insurance’ has the meaning given such term in 
section 220(c)(3). 
‘‘(4) FAMILY COVERAGE.—The term ‘family cov-
erage’ has the meaning given such term in section 
220(c)(5). 
‘‘(5) ARCHER MSA.—The term ‘Archer MSA’ has 
the meaning given such term in section 220(d).