IB 
Union Calendar No. 317 
118TH CONGRESS 
2D SESSION 
H. R. 5687 
[Report No. 118–387] 
To amend the Internal Revenue Code of 1986 to modernize health savings 
accounts. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 26, 2023 
Ms. VAN DUYNE introduced the following bill; which was referred to the 
Committee on Ways and Means 
FEBRUARY 13, 2024 
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 September 26, 2023] 
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A BILL 
To amend the Internal Revenue Code of 1986 to modernize 
health savings accounts. 
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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 ‘‘HSA Modernization Act 
of 2023’’. 
SEC. 2. INDIVIDUALS WITHOUT SERVICE-CONNECTED DIS-
ABILITY AND ELIGIBLE FOR CERTAIN VET-
ERANS 
BENEFITS 
PERMITTED 
TO 
CON-
TRIBUTE TO HEALTH SAVINGS ACCOUNTS. 
(a) IN GENERAL.—Section 223(c)(1)(C) of the Internal 
Revenue Code of 1986 is amended by striking ‘‘for a service- 
connected disability (within the meaning of section 101(16) 
of title 38, United States Code)’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025. 
SEC. 3. INDIVIDUALS ENTITLED TO PART A OF MEDICARE 
BY REASON OF AGE ALLOWED TO CON-
TRIBUTE TO HEALTH SAVINGS ACCOUNTS. 
(a) IN GENERAL.—Section 223(c)(1)(B) of the Inter-
nal Revenue Code of 1986 is amended by striking ‘‘and’’ 
at the end of clause (ii), by striking the period at the end 
of clause (iii) and inserting ‘‘, and’’, and by adding at the 
end the following new clause: 
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‘‘(iv) entitlement to hospital insurance 
benefits under part A of title XVIII of the 
Social Security Act by reason of section 
226(a) of such Act.’’. 
(b) TREATMENT OF HEALTH INSURANCE PURCHASED 
FROM ACCOUNT.—Section 223(d)(2)(C)(iv) of such Code is 
amended by inserting ‘‘and who is not an eligible indi-
vidual’’ after ‘‘who has attained the age specified in section 
1811 of the Social Security Act’’. 
(c) COORDINATION WITH PENALTY ON DISTRIBUTIONS 
NOT USED FOR QUALIFIED MEDICAL EXPENSES.—Section 
223(f)(4)(C) of such Code is amended by striking ‘‘Subpara-
graph (A)’’ and inserting ‘‘Except in the case of an eligible 
individual, subparagraph (A)’’ 
(d) CONFORMING AMENDMENT.—Section 223(b)(7) of 
such Code is amended by inserting ‘‘(other than an entitle-
ment to benefits described in subsection (c)(1)(B)(iv))’’ after 
‘‘Social Security Act’’. 
(e) EFFECTIVE DATE.—The amendments made by this 
section shall apply to months beginning after December 31, 
2025, in taxable years ending after such date. 
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SEC. 4. INDIVIDUALS ELIGIBLE FOR INDIAN HEALTH SERV-
ICE ASSISTANCE NOT DISQUALIFIED FROM 
HEALTH SAVINGS ACCOUNTS. 
(a) IN GENERAL.—Section 223(c)(1) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new subparagraph: 
‘‘(E) SPECIAL RULE FOR INDIVIDUALS ELI-
GIBLE FOR ASSISTANCE UNDER INDIAN HEALTH 
SERVICE PROGRAMS.—For purposes of subpara-
graph (A)(ii), an individual shall not be treated 
as covered under a health plan described in such 
subparagraph merely because the individual re-
ceives hospital care or medical services under a 
medical care program of the Indian Health Serv-
ice or of a tribal organization.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025. 
SEC. 5. ALLOWANCE OF BRONZE AND CATASTROPHIC 
PLANS IN CONNECTION WITH HEALTH SAV-
INGS ACCOUNTS. 
(a) IN GENERAL.—Section 223(c)(2) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new subparagraph: 
‘‘(H) BRONZE
AND
CATASTROPHIC
PLANS 
TREATED
AS
HIGH
DEDUCTIBLE
HEALTH 
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PLANS.—The term ‘high deductible health plan’ 
shall include any plan described in subsection 
(d)(1)(A) or (e) of section 1302 of the Patient 
Protection and Affordable Care Act.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to months beginning after December 31, 
2025, in taxable years ending after such date. 
SEC. 6. SAFE HARBOR FOR ABSENCE OF DEDUCTIBLE FOR 
MENTAL HEALTH SERVICES. 
(a) IN GENERAL.—Section 223(c)(2) of the Internal 
Revenue Code of 1986, as amended by this Act, is amended 
by adding at the end the following new subparagraph: 
‘‘(I) SAFE HARBOR FOR ABSENCE OF DE-
DUCTIBLE FOR MENTAL HEALTH SERVICES.—A 
plan shall not fail to be treated as a high deduct-
ible health plan by reason of failing to have a 
deductible for not more than the first $500 of 
any mental health benefits (as defined in section 
9812(e)(4)) specified by the plan for purposes of 
this subparagraph.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to plan years beginning after December 
31, 2025. 
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SEC. 7. SPECIAL RULE FOR CERTAIN MEDICAL EXPENSES 
INCURRED 
BEFORE 
ESTABLISHMENT 
OF 
HEALTH SAVINGS ACCOUNT. 
(a) IN GENERAL.—Section 223(d)(2) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new subparagraph: 
‘‘(E) TREATMENT OF CERTAIN MEDICAL EX-
PENSES INCURRED BEFORE ESTABLISHMENT OF 
ACCOUNT.—If a health savings account is estab-
lished during the 60-day period beginning on the 
date that coverage of the account beneficiary 
under a high deductible health plan begins, then, 
solely for purposes of determining whether an 
amount paid is used for a qualified medical ex-
pense, such account shall be treated as having 
been established on the date that such coverage 
begins.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply with respect to coverage beginning after 
December 31, 2025. 
SEC. 8. ALLOW BOTH SPOUSES TO MAKE CATCH-UP CON-
TRIBUTIONS TO THE SAME HEALTH SAVINGS 
ACCOUNT. 
(a) IN GENERAL.—Section 223(b)(5) of the Internal 
Revenue Code of 1986 is amended to read as follows: 
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‘‘(5) SPECIAL RULE FOR MARRIED INDIVIDUALS 
WITH FAMILY COVERAGE.— 
‘‘(A) IN GENERAL.—In the case of individ-
uals who are married to each other, if both 
spouses are eligible individuals and either spouse 
has family coverage under a high deductible 
health plan as of the first day of any month— 
‘‘(i) the limitation under paragraph 
(1) shall be applied by not taking into ac-
count any other high deductible health plan 
coverage of either spouse (and if such 
spouses both have family coverage under 
separate high deductible health plans, only 
one such coverage shall be taken into ac-
count), 
‘‘(ii) such limitation (after application 
of clause (i)) shall be reduced by the aggre-
gate amount paid to Archer MSAs of such 
spouses for the taxable year, and 
‘‘(iii) such limitation (after applica-
tion of clauses (i) and (ii)) shall be divided 
equally between such spouses unless they 
agree on a different division. 
‘‘(B) TREATMENT
OF
ADDITIONAL
CON-
TRIBUTION AMOUNTS.—If both spouses referred 
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to in subparagraph (A) have attained age 55 be-
fore the close of the taxable year, the limitation 
referred to in subparagraph (A)(iii) which is 
subject to division between the spouses shall in-
clude the additional contribution amounts deter-
mined under paragraph (3) for both spouses. In 
any other case, any additional contribution 
amount determined under paragraph (3) shall 
not be taken into account under subparagraph 
(A)(iii) and shall not be subject to division be-
tween the spouses.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025. 
SEC. 9. MAXIMUM CONTRIBUTION LIMIT TO HEALTH SAV-
INGS ACCOUNT INCREASED TO AMOUNT OF 
DEDUCTIBLE AND OUT-OF-POCKET LIMITA-
TION. 
(a) SELF-ONLY COVERAGE.—Section 223(b)(2)(A) of 
the Internal Revenue Code of 1986 is amended by striking 
‘‘$2,250’’ and inserting ‘‘the amount in effect under sub-
section (c)(2)(A)(ii)(I)’’. 
(b) FAMILY COVERAGE.—Section 223(b)(2)(B) of such 
Code is amended by striking ‘‘$4,500’’ and inserting ‘‘the 
amount in effect under subsection (c)(2)(A)(ii)(II)’’. 
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(c) CONFORMING AMENDMENTS.—Section 223(g)(1) of 
such Code is amended— 
(1) by striking ‘‘subsections (b)(2) and’’ both 
places it appears and inserting ‘‘subsection’’, and 
(2) in subparagraph (B), by striking ‘‘deter-
mined by’’ and all that follows through ‘‘ ‘calendar 
year 2003’.’’ and inserting ‘‘determined by sub-
stituting ‘calendar year 2003’ for ‘calendar year 
2016’ in subparagraph (A)(ii) thereof.’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025. 
SEC. 10. CLARIFICATION OF TREATMENT OF DISTRIBU-
TIONS FROM HEALTH SAVINGS ACCOUNT FOR 
LONG-TERM CARE SERVICES. 
(a) IN GENERAL.—Section 223(d)(2)(A) of the Inter-
nal Revenue Code of 1986 is amended by inserting before 
the last sentence the following: ‘‘Such term includes 
amounts paid for qualified long-term care services (as de-
fined in section 7702B(c)).’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to amounts paid after the date of the 
enactment of this Act. 
(c) NO INFERENCE.—Nothing contained in this section 
or the amendment made thereby shall be construed to create 
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any inference with respect to any amounts paid on or before 
such date. 
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Union Calendar No. 317 
118TH CONGRESS 
2D SESSION 
H. R. 5687 
[Report No. 118–387] 
A BILL 
To amend the Internal Revenue Code of 1986 to 
modernize health savings accounts. 
FEBRUARY 13, 2024 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed 
VerDate Sep 11 2014 
00:19 Feb 14, 2024
Jkt 049200
PO 00000
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