I 
110TH CONGRESS 
1ST SESSION H. R. 2639 
To amend the Internal Revenue Code of 1986 to modify the rules with 
respect to health savings accounts and medical savings accounts, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 11, 2007 
Mr. BOUSTANY introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committee on Energy 
and Commerce, for a period to be subsequently determined by the Speak-
er, in each case for consideration of such provisions as fall within the ju-
risdiction of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to modify 
the rules with respect to health savings accounts and 
medical savings accounts, 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 ‘‘Promoting Health for 
Future Generations Act of 2007’’. 
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SEC. 2. INCREASE IN HSA CONTRIBUTION LIMITATION. 
(a) IN GENERAL.—Subsection (b) of section 223 of 
the Internal Revenue Code of 1986 (relating to monthly 
limitation) is amended— 
(1) by striking ‘‘$2,250’’ in paragraph (2)(A) 
and inserting ‘‘the amount in effect under subsection 
(c)(2)(A)(ii)(I)’’, and 
(2) by striking ‘‘$4,500’’ in paragraph (2)(B) 
and inserting ‘‘the amount in effect under subsection 
(c)(2)(A)(ii)(II)’’. 
(b) CONFORMING AMENDMENT.—Paragraph (1) of 
section 223(g) of such Code is amended by striking ‘‘sub-
sections (b)(2)’’ and inserting ‘‘subsection’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contributions in taxable years 
beginning after December 31, 2007. 
SEC. 3. MEDICARE AND VA HEALTHCARE ENROLLEES ELI-
GIBLE TO CONTRIBUTE TO HSA. 
(a) IN GENERAL.—(1) Subsection (b) of section 223 
of the Internal Revenue Code of 1986 is amended by strik-
ing paragraph (7). 
(2) Subsection (c) of section 223 of such Code (relat-
ing to definitions and special rules) is amended by adding 
at the end to following new paragraph: 
‘‘(6) SPECIAL
RULE
FOR
INDIVIDUALS
ENTI-
TLED
TO
BENEFITS
UNDER
MEDICARE
OR
EN-
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ROLLED FOR HEALTH BENEFITS FROM VA.—In the 
case of an individual— 
‘‘(A)(i) who is entitled to benefits under 
title XVIII of the Social Security Act, and 
‘‘(ii) with respect to whom a health savings 
account is established in a month before the 
first month such individual is entitled to such 
benefits, or 
‘‘(B)(i) who is enrolled in the patient en-
rollment system established by the Secretary of 
Veterans Affairs pursuant to section 1705 of 
title 38, United States Code, and 
‘‘(ii) with respect to whom a health savings 
account is established in a month before the 
first month such individual is enrolled in such 
system, 
such individual shall be deemed to be an eligible in-
dividual.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 4. EXPANDING ADDITIONAL CONTRIBUTIONS LIMITA-
TION. 
(a) IN GENERAL.— 
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(1) AGE
LIMITATION.—Subparagraph (A) of 
section 223(b)(3) of the Internal Revenue Code of 
1986 (relating to additional contributions for indi-
viduals 55 or older) is amended by striking ‘‘age 55’’ 
and inserting ‘‘age 50’’. 
(2) CONTRIBUTION
LIMITATION.—The table 
contained in section 223(b)(3) of such Code is 
amended— 
(A) by striking ‘‘$900’’ and inserting 
‘‘$2,000’’, and 
(B) by striking ‘‘$1,000’’ and inserting 
‘‘$2,000’’. 
(3) CONFORMING AMENDMENT.—Paragraph (3) 
of section 223(b) of such Code is amended in the 
heading by striking ‘‘55’’ and inserting ‘‘50’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 5. ELIGIBILITY TO CONTRIBUTE TO HSA. 
(a) INDIVIDUALS ELIGIBLE FOR REIMBURSEMENT 
UNDER
SPOUSE’S
FLEXIBLE
SPENDING
ARRANGE-
MENT.—Section 223(c)(1) of the Internal Revenue Code 
of 1986 (defining eligible individual) is amended by adding 
at the end the following new subparagraph: 
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‘‘(C) SPECIAL RULE FOR CERTAIN FLEXI-
BLE SPENDING ARRANGEMENTS.—For purposes 
of subparagraph (A)(ii), an individual shall not 
be treated as covered under a health plan de-
scribed in such subparagraph merely because 
the individual is covered under a flexible spend-
ing arrangement (within the meaning of section 
106(c)(2)) which is maintained by an employer 
of the spouse of the individual, but only if— 
‘‘(i) the employer is not also the em-
ployer of the individual, and 
‘‘(ii) the individual certifies to the em-
ployer and to the Secretary (in such form 
and manner as the Secretary may pre-
scribe) that the individual and the individ-
ual’s spouse will not accept reimbursement 
under the arrangement for any expenses 
for medical care provided to the indi-
vidual.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
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SEC. 6. PERMITTING MEDICARE SUPPLEMENTAL POLICY 
AS QUALIFIED MEDICAL EXPENSE. 
(a) 
IN
GENERAL.—Clause 
(iv) 
of 
section 
223(d)(2)(C) of the Internal Revenue Code of 1986 (relat-
ing to qualified medical expenses) is amended by striking 
‘‘other than a medicare supplemental policy’’ and all that 
follows through ‘‘Social Security Act)’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 7. DEDUCTION OF PREMIUMS FOR HIGH DEDUCTIBLE 
HEALTH PLANS. 
(a) IN GENERAL.—Part VII of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
additional itemized deductions for individuals) is amended 
by redesignating section 224 as section 225 and by insert-
ing after section 223 the following new section: 
‘‘SEC. 224. PREMIUMS FOR HIGH DEDUCTIBLE HEALTH 
PLANS. 
‘‘(a) DEDUCTION ALLOWED.—In the case of an indi-
vidual, there shall be allowed as a deduction for the tax-
able year the aggregate amount paid by the taxpayer as 
premiums under a high deductible health plan with respect 
to months during such year for which such individual is 
an eligible individual with respect to such health plan. 
‘‘(b) DEFINITIONS.—For purposes of this section— 
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‘‘(1) ELIGIBLE INDIVIDUAL.—The term ‘eligible 
individual’ means an individual who— 
‘‘(A) is described in section 223(c)(1), and 
‘‘(B) is the taxpayer or the taxpayer’s 
spouse and dependents. 
‘‘(2) HIGH DEDUCTIBLE HEALTH PLAN.—The 
term ‘high deductible health plan’ has the meaning 
given such term by section 223(c)(2). 
‘‘(c) SPECIAL RULES.— 
‘‘(1) DEDUCTION LIMITS.— 
‘‘(A) DEDUCTION ALLOWABLE FOR ONLY 1 
PLAN.—For purposes of this section, in the 
case of an individual covered by more than 1 
high deductible health plan for any month, the 
individual may only take into account amounts 
paid for such month for the plan with the low-
est premium . 
‘‘(B) PLANS COVERING INELIGIBLE INDI-
VIDUALS.—If 2 or more individuals are covered 
by a high deductible health plan for any month 
but only 1 of such individuals is an eligible indi-
vidual for such month, only 50 percent of the 
aggregate amount paid by such eligible indi-
vidual as premiums under the plan with respect 
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to such month shall be taken into account for 
purposes of this section. 
‘‘(2) GROUP HEALTH PLAN COVERAGE.— 
‘‘(A) IN GENERAL.—No deduction shall be 
allowed for an individual under subsection (a) 
for any amount paid for coverage under a high 
deductible health plan for a month if that indi-
vidual participates in any coverage under a 
group health plan (within the meaning of sec-
tion 5000 without regard to section 5000(d)). 
For purposes of the preceding sentence, an ar-
rangement which constitutes individual health 
insurance shall not be treated as a group health 
plan if such arrangement is a high deductible 
health plan (as defined in section 223(c)(2)), or 
is a payment by an employer or employee orga-
nization with respect to such high deductible 
health plan , notwithstanding that an employer 
or employee organization negotiates the cost or 
benefits of such arrangement. 
‘‘(B) EXCEPTION FOR PLANS ONLY PRO-
VIDING
CONTRIBUTIONS
TO
HEALTH
SAVINGS 
ACCOUNTS.—Subparagraph (A) shall not apply 
to an individual if the individual’s only coverage 
under a group health plan for a month consists 
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of contributions by an employer to a health sav-
ings account with respect to which the indi-
vidual is the account beneficiary. 
‘‘(C) EXCEPTION
FOR
CERTAIN
PER-
MITTED
COVERAGE.—Subparagraph (A) shall 
not apply to an individual if the individual’s 
only coverage under a group health plan for a 
month is coverage described in clause (i) or (ii) 
of section 223(c)(1)(B). 
‘‘(3) MEDICAL
AND
HEALTH
SAVINGS
AC-
COUNTS.—Subsection (a) shall not apply with re-
spect to any amount which is paid or distributed out 
of an Archer MSA or a health savings account which 
is not included in gross income under section 220(f) 
or 223(f), as the case may be. 
‘‘(4) COORDINATION
WITH
DEDUCTION
FOR 
HEALTH INSURANCE OF SELF-EMPLOYED INDIVID-
UALS.—Any amount taken into account by the tax-
payer in computing the deduction under section 
162(l) shall not be taken into account under this 
section. 
‘‘(5) COORDINATION WITH MEDICAL EXPENSE 
DEDUCTION.—Any amount taken into account by 
the taxpayer in computing the deduction under this 
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section shall not be taken into account under section 
213.’’. 
(b) DEDUCTION ALLOWED WHETHER OR NOT INDI-
VIDUAL ITEMIZES OTHER DEDUCTIONS.—Subsection (a) 
of section 62 of such Code is amended by inserting before 
the last sentence at the end the following new paragraph: 
‘‘(22) PREMIUMS
FOR
HIGH
DEDUCTIBLE 
HEALTH PLANS.—The deduction allowed by section 
224.’’. 
(c) COORDINATION WITH SECTION 35 HEALTH IN-
SURANCE COSTS CREDIT.—Section 35(g)(2) of such Code 
(relating to coordination with other deductions) is amend-
ed by striking ‘‘or 213’’ and inserting ‘‘, 213, or 224’’. 
(d) CLERICAL AMENDMENT.—The table of sections 
for part VII of subchapter B of chapter 1 of such Code 
is amended by redesignating the item relating to section 
224 as an item relating to section 225 and by inserting 
before such item the following new item: 
‘‘Sec. 224. Premiums for high deductible health plans.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 
8. 
MODIFYING 
SAFE 
HARBOR 
RULES 
FOR 
DEDUCTIBLES 
FOR 
HIGH 
DEDUCTIBLE 
HEALTH PLANS. 
(a) IN GENERAL.— 
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(1) DEDUCTIBLE FOR PRESCRIBED DRUGS.— 
Subparagraph (C) of section 223(c)(2) of the Inter-
nal Revenue Code of 1986 (defining high deductible 
health plan) is amended by striking ‘‘a deductible 
for preventative care’’ and all that follows and in-
serting the following: ‘‘a deductible for— 
‘‘(i) preventive care (within the mean-
ing of section 1861 of the Social Security 
Act, except as otherwise provided by the 
Secretary), or 
‘‘(ii) a prescribed drug (as defined in 
section 213).’’. 
(2) INDIVIDUAL DEDUCTIBLE LIMIT FOR FAM-
ILY
PLANS.—Section 223(c)(2) of such Code is 
amended by adding at the end the following new 
subparagraph: 
‘‘(E) SPECIAL
RULE
FOR
FAMILY
COV-
ERAGE.—A health plan providing family cov-
erage shall not fail to meet the requirements of 
subparagraph (A)(i)(II) merely because the 
plan elects to provide both— 
‘‘(i) an aggregate annual deductible 
limit for all individuals covered by the plan 
which is not less than the amount in effect 
under subparagraph (A)(i)(II), and 
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‘‘(ii) an annual deductible limit for 
each individual covered by the plan which 
is not less than the amount in effect under 
subparagraph (A)(i)(I).’’. 
(3) CONFORMING AMENDMENT.—Subparagraph 
(C) of section 223(c)(2) of such Code is amended in 
the heading by inserting ‘‘OR PRESCRIBED DRUG’’ 
after ‘‘PREVENTIVE CARE’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 9. MSA PLAN DEDUCTIBLE EXCEPTION FOR PREVEN-
TIVE CARE. 
(a) IN GENERAL.—Paragraph (3) of section 1859(b) 
of the Social Security Act (42 U.S.C. 1359w–28(b)) is 
amended by adding at the end the following new subpara-
graph: 
‘‘(C) EXCEPTION FOR ABSENCE OF PRE-
VENTIVE CARE DEDUCTIBLE.—A plan shall not 
fail to be treated as a MSA plan by reason of 
failing to have a deductible for preventive care 
(within the meaning of such term as applied for 
purposes of section 223(c)(2)(C) of the Internal 
Revenue Code of 1986).’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect on January 1, 2008. 
SEC. 10. PERMITTING INDIVIDUAL CONTRIBUTIONS TO 
MEDICARE ADVANTAGE MSA. 
(a) IN GENERAL.—Paragraph (2) of section 138(b) 
of the Internal Revenue Code of 1986 (defining Medicare 
Advantage MSA) is amended by striking ‘‘or’’ at the end 
of subparagraph (A), by inserting ‘‘or’’ at the end of sub-
paragraph (B), and by adding at the end the following 
new subparagraph: 
‘‘(C) any contributions by or for the ben-
efit of the account holder (other than a con-
tribution described in subparagraph (A)) for 
the taxable year, the sum of which do not ex-
ceed the difference of— 
‘‘(i) the amount of the annual deduct-
ible (described in section 1859(b)(3)(B) of 
the Social Security Act) for the MSA plan 
in which the individual is enrolled, over 
‘‘(ii) the amount of contributions de-
scribed in subparagraph (A) for the tax-
able year,’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
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