I 
116TH CONGRESS 
2D SESSION 
H. R. 8473 
To amend the Internal Revenue Code of 1986 to consolidate health accounts 
into Medisave Accounts, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 1, 2020 
Mr. GONZALEZ of Ohio (for himself and Mr. WESTERMAN) introduced the fol-
lowing bill; which was referred to the Committee on Ways and Means, 
and in addition to the Committee on Energy and Commerce, for a period 
to be subsequently determined by the Speaker, in each case for consider-
ation of such provisions as fall within the jurisdiction of the committee 
concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to consolidate 
health accounts into Medisave 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 ‘‘Family First Medisave 
Empowerment Act’’. 
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SEC. 2. MEDISAVE ACCOUNTS. 
(a) IN GENERAL.—Part VIII of subchapter F of 
chapter 1 of the Internal Revenue Code of 1986 is amend-
ed by adding at the end the following new section: 
‘‘SEC. 530A. MEDISAVE ACCOUNTS. 
‘‘(a) MEDISAVE ACCOUNT.—For purposes of this sec-
tion— 
‘‘(1) IN
GENERAL.—The term ‘Medisave ac-
count’ means a trust created or organized in the 
United States as a Medisave account exclusively for 
the purpose of paying the qualified medical expenses 
of the account beneficiary, but only if the written 
governing instrument creating the trust meets the 
following requirements: 
‘‘(A) Except in the case of a rollover con-
tribution described in subparagraph (A) or (B) 
of subsection (e)(5), no contribution will be ac-
cepted— 
‘‘(i) unless it is in cash, 
‘‘(ii) to the extent such contribution, 
when added to previous contributions to 
the trust for the calendar year, exceeds the 
limitation amount specified in subsection 
(b)(1), or 
‘‘(iii) to the extent such contribution, 
when added to the balance of the account, 
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exceeds the limitation amount specified in 
subsection (b)(2). 
‘‘(B) The trustee is a bank (as defined in 
section 408(n)), an insurance company (as de-
fined in section 816), or another person who 
demonstrates to the satisfaction of the Sec-
retary that the manner in which such person 
will administer the trust will be consistent with 
the requirements of this section. 
‘‘(C) No part of the trust assets will be in-
vested in life insurance contracts. 
‘‘(D) The assets of the trust will not be 
commingled with other property except in a 
common trust fund or common investment 
fund. 
‘‘(E) The interest of an individual in the 
balance in his account is nonforfeitable. 
‘‘(2) QUALIFIED MEDICAL EXPENSES.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
medical expenses’ means, with respect to an ac-
count beneficiary, amounts paid by such bene-
ficiary for medical care, but only to the extent 
such amounts are not compensated for by in-
surance or otherwise— 
‘‘(i) for— 
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‘‘(I) such individual, 
‘‘(II) the spouse of such indi-
vidual, 
‘‘(III) any dependent (as defined 
in section 152, determined without re-
gard to subsections (b)(1), (b)(2), and 
(d)(1)(B) thereof) of such individual, 
and 
‘‘(IV) any individual who bears a 
relationship to the account beneficiary 
that is described in subparagraph (C) 
or (D) of section 152(d) if the ac-
count beneficiary is or was a depend-
ent of such individual for any taxable 
year ending before or with the taxable 
year in which the individual attained 
18 years of age, and 
‘‘(ii) if, on the date such medical care 
was provided, such individual, spouse or 
dependent to whom such care was provided 
was covered under the qualified health in-
surance of the account beneficiary. 
‘‘(B) MODIFIED DEFINITION OF MEDICAL 
CARE.—For purposes of subparagraph (A), the 
term ‘medical care’ has the meaning given such 
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term by section 213(d), except that such term 
includes— 
‘‘(i) direct pay arrangements with pri-
mary physicians, and 
‘‘(ii) predetermined level of access to 
care from an integrated health plan. 
‘‘(3) ACCOUNT
BENEFICIARY.—The term ‘ac-
count beneficiary’ means the individual on whose be-
half the Medisave account was established. 
‘‘(4) CERTAIN RULES TO APPLY.—Rules similar 
to the following rules shall apply for purposes of this 
section: 
‘‘(A) Section 219(d)(2) (relating to no de-
duction for rollovers). 
‘‘(B) Section 219(f)(3) (relating to time 
when contributions deemed made). 
‘‘(C) Except as provided in section 106(d), 
section 219(f)(5) (relating to employer pay-
ments). 
‘‘(D) Section 408(g) (relating to commu-
nity property laws). 
‘‘(E) Section 408(h) (relating to custodial 
accounts). 
‘‘(b) LIMITATIONS.— 
‘‘(1) ANNUAL LIMITATION.— 
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‘‘(A) IN GENERAL.—The limitation amount 
specified in this paragraph is— 
‘‘(i) $10,000 in the case of a qualified 
health plan with an actuarial value of less 
than 55 percent, 
‘‘(ii) $8,600 in the case of a qualified 
health plan with an actuarial value that is 
55 percent or more and less than 65 per-
cent, and 
‘‘(iii) $7,200 in the case of a qualified 
health plan with an actuarial value that is 
65 percent or more. 
‘‘(B) ACTUARIAL
VALUE
OF
QUALIFIED 
HEALTH PLAN.—For purposes of subparagraph 
(A), the actuarial value of a qualified health 
plan is the percentage of the total average costs 
of covered benefits under the health plan. 
‘‘(2) ACCOUNT ACCUMULATION LIMITATION.— 
The limitation amount specified in this paragraph is 
$50,000. 
‘‘(3) INDEXING.— 
‘‘(A) IN
GENERAL.—In the case of any 
taxable year beginning in a calendar year after 
2020, each dollar amount contained in para-
graph (1)(A) shall be increased by the medical 
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care cost adjustment of such amount for such 
calendar year. 
‘‘(B) 
MEDICAL
CARE
COST
ADJUST-
MENT.—For purposes of subparagraph (A), the 
medical care cost adjustment for any calendar 
year is the percentage (if any) by which— 
‘‘(i) the medical care component of 
the C–CPI–U (as defined in section 
1(f)(6)) for August of the preceding cal-
endar year, exceeds 
‘‘(ii) such component of the C–CPI–U 
(as so defined) for August of 2019. 
‘‘(C) ROUNDING.— 
‘‘(i) ANNUAL LIMITATION.—If any in-
crease in a dollar amount contained in 
paragraph (1)(A) determined under sub-
paragraph (A) is not a multiple of $100, 
such increase shall be rounded to the near-
est multiple of $100. 
‘‘(ii) ACCOUNT
LIMITATION.—If any 
increase in the dollar amount contained in 
paragraph (2) determined under subpara-
graph (A) is not a multiple of $1,000, such 
increase shall be rounded to the nearest 
multiple of $1,000. 
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‘‘(4) COORDINATION WITH OTHER CONTRIBU-
TIONS.—The limitation which would (but for this 
paragraph) apply under paragraphs (1) and (2) to 
an individual for any taxable year shall be reduced 
(but not below zero) by the sum of— 
‘‘(A) the aggregate amount contributed to 
Medisave accounts of such individual which is 
excludable from the taxpayer’s gross income for 
such taxable year under section 106(d), and 
‘‘(B) the aggregate amount contributed to 
Medisave accounts of such individual for such 
taxable year under section 408(d)(9). 
‘‘(5) DEPOSIT
OF
ADVANCE
PREMIUM
TAX 
CREDIT.—An account beneficiary who is eligible for 
an advance payment of the premium tax credit may 
elect to have the Secretary deposit the advance pay-
ment into the Medisave account of the account bene-
ficiary. 
‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
‘‘(1) ELIGIBLE INDIVIDUAL.— 
‘‘(A) IN GENERAL.—The term ‘eligible in-
dividual’ means, with respect to any month, any 
individual if such individual is covered under a 
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qualified health plan as of the 1st day of such 
month. 
‘‘(B) 
CERTAIN
COVERAGE
DIS-
REGARDED.—Subparagraph (A) shall be ap-
plied without regard 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. 
‘‘(C) SPECIAL RULE FOR INDIVIDUALS ELI-
GIBLE FOR CERTAIN VETERANS BENEFITS.—An 
individual shall not fail to be treated as an eli-
gible individual for any period merely because 
the individual receives hospital care or medical 
services under any law administered by the Sec-
retary of Veterans Affairs for a service-con-
nected disability (within the meaning of section 
101(16) of title 38, United States Code). 
‘‘(2) QUALIFIED HEALTH PLAN.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
health plan’ means a health plan that offers 
health insurance coverage. Such term includes 
entitlement to benefits under title XVIII or title 
XIX of the Social Security Act. 
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‘‘(B) EXCLUSION
OF
CERTAIN
PLANS.— 
Such term does not include a health plan if 
substantially all of its coverage is disregarded 
under paragraph (1)(B). 
‘‘(C) HEALTH
INSURANCE
COVERAGE.— 
The term ‘health insurance coverage’ means 
benefits consisting of medical care (provided di-
rectly, through insurance or reimbursement, or 
otherwise and including items and services paid 
for as medical care) under any hospital or med-
ical service policy or certificate, hospital or 
medical service plan contract, or health mainte-
nance organization contract offered by a health 
insurance issuer. 
‘‘(D) HEALTH
INSURANCE
ISSUER.—The 
term ‘health insurance issuer’ means an insur-
ance company, insurance service, or insurance 
organization (including a health maintenance 
organization) which is licensed to engage in the 
business of insurance in a State and which is 
subject to State law which regulates insurance 
(within the meaning of section 514(b)(2) of the 
Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1144(b)(2)). 
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‘‘(E) HEALTH
MAINTENANCE
ORGANIZA-
TION.—The term ‘health maintenance organiza-
tion’ means— 
‘‘(i) a Federally qualified health main-
tenance organization (as defined in section 
1301(a) of the Public Health Service Act 
(42 U.S.C. 300e(a)), 
‘‘(ii) an organization recognized under 
State law as a health maintenance organi-
zation, or 
‘‘(iii) a similar organization regulated 
under State law for solvency in the same 
manner and to the same extent as such a 
health maintenance organization. 
‘‘(3) PERMITTED INSURANCE.—The term ‘per-
mitted insurance’ means— 
‘‘(A) insurance if substantially all of the 
coverage provided under such insurance relates 
to— 
‘‘(i) liabilities incurred under workers’ 
compensation laws, 
‘‘(ii) tort liabilities, 
‘‘(iii) liabilities relating to ownership 
or use of property, or 
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‘‘(iv) such other similar liabilities as 
the Secretary may specify by regulations, 
‘‘(B) insurance for a specified disease or 
illness, and 
‘‘(C) insurance paying a fixed amount per 
day (or other period) of hospitalization. 
‘‘(4) FAMILY
COVERAGE.—The term ‘family 
coverage’ means any coverage other than self-only 
coverage. 
‘‘(d) TAX TREATMENT OF ACCOUNTS.— 
‘‘(1) IN GENERAL.—A Medisave account is ex-
empt from taxation under this subtitle unless such 
account has ceased to be a Medisave account. Not-
withstanding the preceding sentence, any Medisave 
account is subject to the taxes imposed by section 
511 (relating to imposition of tax on unrelated busi-
ness income of charitable, etc. organizations). 
‘‘(2) ACCOUNT TERMINATIONS.—Rules similar 
to the rules of paragraphs (2) and (4) of section 
408(e) shall apply to Medisave accounts, and any 
amount treated as distributed under such rules shall 
be treated as not used to pay qualified medical ex-
penses. 
‘‘(e) TAX TREATMENT OF DISTRIBUTIONS.— 
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‘‘(1) AMOUNTS USED FOR QUALIFIED MEDICAL 
EXPENSES.—Any amount paid or distributed out of 
a Medisave account which is used exclusively to pay 
qualified medical expenses of any account beneficiary 
shall not be includible in gross income. 
‘‘(2) INCLUSION OF AMOUNTS NOT USED FOR 
QUALIFIED MEDICAL EXPENSES.—Any amount paid 
or distributed out of a Medisave account which is 
not used exclusively to pay the qualified medical ex-
penses of the account beneficiary shall be included in 
the gross income of such beneficiary. 
‘‘(3) EXCESS CONTRIBUTIONS RETURNED BE-
FORE DUE DATE OF RETURN.— 
‘‘(A) IN
GENERAL.—If any excess con-
tribution is contributed for a taxable year to 
any Medisave account of an individual, para-
graph (2) shall not apply to distributions from 
the Medisave accounts of such individual (to the 
extent such distributions do not exceed the ag-
gregate excess contributions to all such ac-
counts of such individual for such year) if— 
‘‘(i) such distribution is received by 
the individual on or before the last day 
prescribed by law (including extensions of 
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time) for filing such individual’s return for 
such taxable year, and 
‘‘(ii) such distribution is accompanied 
by the amount of net income attributable 
to such excess contribution. 
Any net income described in clause (ii) shall be 
included in the gross income of the individual 
for the taxable year in which it is received. 
‘‘(B) EXCESS
CONTRIBUTION.—For pur-
poses of subparagraph (A), the term excess con-
tribution means any contribution (other than a 
rollover contribution described in paragraph 
(5)) which exceeds the limitations specified in 
subsection (b). 
‘‘(4) ADDITIONAL TAX ON DISTRIBUTIONS NOT 
USED FOR QUALIFIED MEDICAL EXPENSES.— 
‘‘(A) IN GENERAL.—The tax imposed by 
this chapter on the account beneficiary for any 
taxable year in which there is a payment or dis-
tribution from a Medisave account of such ben-
eficiary which is includible in gross income 
under paragraph (2) shall be increased by 20 
percent of the amount which is so includible. 
‘‘(B) EXCEPTION
FOR
DISABILITY
OR 
DEATH.—Subparagraph (A) shall not apply if 
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the payment or distribution is made after the 
account beneficiary becomes disabled within the 
meaning of section 72(m)(7) or dies. 
‘‘(5) ROLLOVER CONTRIBUTION.— 
‘‘(A) IN
GENERAL.—An amount is de-
scribed in this subparagraph as a rollover con-
tribution if it meets the requirements of clauses 
(i) and (ii). 
‘‘(i) IN
GENERAL.—Paragraph (2) 
shall not apply to any amount paid or dis-
tributed from a Medisave account to the 
account beneficiary to the extent the 
amount received is paid into a Medisave 
account for the benefit of such beneficiary 
not later than the 60th day after the day 
on which the beneficiary receives the pay-
ment or distribution. 
‘‘(ii) LIMITATION.—This paragraph 
shall not apply to any amount described in 
clause (i) received by an individual from a 
Medisave account if, at any time during 
the 1-year period ending on the day of 
such receipt, such individual received any 
other amount described in clause (i) from 
a Medisave account which was not includ-
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ible in the individual’s gross income be-
cause of the application of this paragraph. 
‘‘(B) ROLLOVER FROM FSA, ARCHER MSA, 
AND HSA.—An amount is described in this sub-
paragraph for a calendar year as a rollover con-
tribution if the amount is the remaining balance 
in a flexible spending account, Archer MSA, or 
health savings account that is contributed to 
the Medisave account for a taxable year ending 
on or before one year after the date of the en-
actment of the Family First Medisave Em-
powerment Act. 
‘‘(6) COORDINATION WITH MEDICAL EXPENSE 
DEDUCTION.—For purposes of determining the 
amount of the deduction under section 213, any pay-
ment or distribution out of a Medisave account for 
qualified medical expenses shall not be treated as an 
expense paid for medical care. 
‘‘(7) TRANSFER OF ACCOUNT INCIDENT TO DI-
VORCE.—The transfer of an individual’s interest in 
a Medisave account to an individual’s spouse or 
former spouse under a divorce or separation instru-
ment described in clause (i) of section 121(d)(3)(C) 
shall not be considered a taxable transfer made by 
such individual notwithstanding any other provision 
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of this subtitle, and such interest shall, after such 
transfer, be treated as a Medisave account with re-
spect to which such spouse is the account bene-
ficiary. 
‘‘(8) TREATMENT AFTER DEATH OF ACCOUNT 
BENEFICIARY.— 
‘‘(A) TREATMENT IF DESIGNATED BENE-
FICIARY
IS
SPOUSE.—If the account bene-
ficiary’s surviving spouse acquires such bene-
ficiary’s interest in a Medisave account by rea-
son of being the designated beneficiary of such 
account at the death of the account beneficiary, 
such Medisave account shall be treated as if the 
spouse were the account beneficiary. 
‘‘(B) OTHER CASES.— 
‘‘(i) IN GENERAL.—If, by reason of 
the death of the account beneficiary, any 
person acquires the account beneficiary’s 
interest in a Medisave account in a case to 
which subparagraph (A) does not apply— 
‘‘(I) such account shall cease to 
be a Medisave account as of the date 
of death, and 
‘‘(II) an amount equal to the fair 
market value of the assets in such ac-
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count on such date shall be includible 
if such person is not the estate of 
such beneficiary, in such person’s 
gross income for the taxable year 
which includes such date, or if such 
person is the estate of such bene-
ficiary, in such beneficiary’s gross in-
come for the last taxable year of such 
beneficiary. 
‘‘(ii) SPECIAL RULES.— 
‘‘(I) REDUCTION
OF
INCLUSION 
FOR
PREDEATH
EXPENSES.—The 
amount includible in gross income 
under clause (i) by any person (other 
than the estate) shall be reduced by 
the amount of qualified medical ex-
penses which were incurred by the de-
cedent before the date of the dece-
dent’s death and paid by such person 
within 1 year after such date. 
‘‘(II) DEDUCTION
FOR
ESTATE 
TAXES.—An 
appropriate 
deduction 
shall be allowed under section 691(c) 
to any person (other than the dece-
dent or the decedent’s spouse) with 
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respect to amounts included in gross 
income under clause (i) by such per-
son. 
‘‘(f) REPORTS.—The Secretary may require— 
‘‘(1) the trustee of a Medisave account to make 
such reports regarding such account to the Secretary 
and to the account beneficiary with respect to con-
tributions, distributions, the return of excess con-
tributions, and such other matters as the Secretary 
determines appropriate, and 
‘‘(2) any person who provides an individual with 
a qualified health plan to make such reports to the 
Secretary and to the account beneficiary with re-
spect to such plan as the Secretary determines ap-
propriate. 
The reports required by this subsection shall be filed at 
such time and in such manner and furnished to such indi-
viduals at such time and in such manner as may be re-
quired by the Secretary. 
‘‘(g) REGULATIONS AND GUIDANCE.—For purposes 
of this section, the Secretary shall prescribe such regula-
tions or other guidance as the Secretary determines nec-
essary or appropriate to carry out this section, including 
regulations or guidance on the methods acceptable to the 
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Secretary for determining qualified health plan actuarial 
value.’’. 
(b) TREATMENT OF EMPLOYER PAYMENTS.— 
(1) EXCLUSION
LIMITED
TO
SELF-FUNDED 
MAJOR
MEDICAL
PLAN
OF
EMPLOYERS.—Section 
105(b) of such Code is amended by striking ‘‘paid,’’ 
and inserting ‘‘paid under a self-funded major med-
ical plan of the employer’’. 
(2) EXCLUSION NOT APPLICABLE TO HEALTH 
REIMBURSEMENT
ARRANGEMENTS.—Subsection (h) 
of such Code is amended to read as follows: 
‘‘(h) EXCLUSION NOT APPLICABLE TO HEALTH RE-
IMBURSEMENT ARRANGEMENTS.—Subsection (b) shall 
not apply to health reimbursement arrangements.’’. 
(3) REPEAL OF EXCLUSIONS FROM INCOME FOR 
ARCHER MSAS, FSAS, AND HSAS.— 
(A) IN
GENERAL.—Section 106 of such 
Code is amended— 
(i) by striking subsections (b), (d), 
and (e), and 
(ii) by redesignating subsections (f) 
and (g) as subsections (d) and (e), respec-
tively. 
(B) 
EXCLUSION
FROM
INCOME
FOR 
MEDISAVE
ACCOUNTS.—Section 106 of such 
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Code, as amended by subparagraph (A), is 
amended by inserting after subsection (a) the 
following: 
‘‘(b) CONTRIBUTIONS TO MEDISAVE ACCOUNTS.— 
‘‘(1) IN GENERAL.—In the case of an employee 
who is an eligible individual (as defined in section 
530A(c)(1)), amounts contributed by such employ-
ee’s employer to any Medisave account (as defined in 
section 530A(a)) of such employee shall be treated 
as employer-provided coverage for medical expenses 
under an accident or health plan to the extent such 
amounts do not exceed the limitations specified in 
clauses (ii) and (iii) of section 530A(a)(1)(A) (deter-
mined without regard to this subsection) which is 
applicable to such employee for such taxable year. 
‘‘(2) NO CONSTRUCTIVE RECEIPT.—No amount 
shall be included in the gross income of any em-
ployee solely because the employee may choose be-
tween the contributions referred to in paragraph (1) 
and employer contributions to another health plan of 
the employer. 
‘‘(3) SPECIAL RULE FOR DEDUCTION OF EM-
PLOYER CONTRIBUTIONS.—Any employer contribu-
tion to a Medisave account, if otherwise allowable as 
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a deduction under this chapter, shall be allowed only 
for the taxable year in which paid. 
‘‘(4) EMPLOYER
MEDISAVE
ACCOUNT
CON-
TRIBUTIONS
REQUIRED
TO
BE
SHOWN
ON
RE-
TURN.—Every individual required to file a return 
under section 6012 for the taxable year shall include 
on such return the aggregate amount contributed by 
employers to the Medisave accounts of such indi-
vidual or such individual’s spouse for such taxable 
year. 
‘‘(5) MEDISAVE ACCOUNT CONTRIBUTIONS NOT 
PART OF COBRA COVERAGE.—Paragraph (1) shall 
not apply for purposes of section 4980B. 
‘‘(6) CROSS REFERENCE.—For penalty on fail-
ure by employer to make comparable contributions 
to the Medisave accounts of comparable employees, 
see section 4980G.’’. 
(4) DISTRIBUTION FROM CERTAIN RETIREMENT 
ACCOUNTS
FOR
MEDISAVE
ACCOUNT
FUNDING.— 
Section 408(d)(9) of such Code is amended to read 
as follows: 
‘‘(9) DISTRIBUTION
FOR
MEDISAVE
ACCOUNT 
FUNDING.— 
‘‘(A) IN GENERAL.—In the case of an indi-
vidual who is an eligible individual (as defined 
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in section 530A(c)(1)) and who elects the appli-
cation of this paragraph for a taxable year, 
gross income of the individual for the taxable 
year does not include a qualified Medisave ac-
count funding distribution to the extent such 
distribution is otherwise includible in gross in-
come. 
‘‘(B) 
QUALIFIED
MEDISAVE
ACCOUNT 
FUNDING DISTRIBUTION.—For purposes of this 
paragraph, the term ‘qualified Medisave ac-
count funding distribution’ means a distribution 
from an individual retirement plan (other than 
a plan described in subsection (k) or (p)) of the 
employee to the extent that— 
‘‘(i) such distribution is contributed to 
the Medisave account of the individual in 
a direct trustee-to-trustee transfer, and 
‘‘(ii) such distribution— 
‘‘(I) when added to previous con-
tributions to the Medisave account for 
the calendar year does not exceed the 
limitation amount specified in section 
530A(b)(1), and 
‘‘(II) when added to the balance 
of the Medisave account, exceeds the 
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limitation amount specified in section 
530A(b)(2). 
‘‘(C) ONE-TIME TRANSFER.—An individual 
may make an election under subparagraph (A) 
only for one qualified Medisave account funding 
distribution during the lifetime of the indi-
vidual. Such an election, once made, shall be ir-
revocable. 
‘‘(D) APPLICATION OF SECTION 72.—Not-
withstanding section 72, in determining the ex-
tent to which an amount is treated as otherwise 
includible in gross income for purposes of sub-
paragraph (A), the aggregate amount distrib-
uted from an individual retirement plan shall be 
treated as includible in gross income to the ex-
tent that such amount does not exceed the ag-
gregate amount which would have been so in-
cludible if all amounts from all individual retire-
ment plans were distributed. Proper adjust-
ments shall be made in applying section 72 to 
other distributions in such taxable year and 
subsequent taxable years.’’. 
(5) FAILURE
OF
EMPLOYER
TO
MAKE
COM-
PARABLE CONTRIBUTIONS.— 
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(A) Section 4980G(a) of such Code is 
amended by striking ‘‘health savings account’’ 
and inserting ‘‘Medisave account’’. 
(B) Section 4980G(c) of such Code is 
amended by striking ‘‘Archer MSAs and health 
savings accounts’’ and inserting ‘‘Medisave ac-
counts’’. 
(6) W–2 STATEMENTS.—Section 6051(a) of 
such Code is amended— 
(A) by striking paragraph (11) and redes-
ignating paragraphs (12) through (17) as para-
graphs (11) through (16), respectively, and 
(B) by amending paragraph (11), as so re-
designated, to read as follows: 
‘‘(11) the amount contributed to any Medisave 
account (as defined in section 530A) of such em-
ployee or such employee’s spouse,’’. 
(c) OTHER CONFORMING AMENDMENTS.— 
(1) ARCHER
MSAS.—Section 220(a) of such 
Code is amended by adding at the end the following: 
‘‘No amount is allowed as a deduction under the 
preceding sentence for any taxable year beginning 
after one year after the date of the enactment of 
Family First Medisave Empowerment Act.’’. 
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(2) 
HEALTH
SAVINGS
ACCOUNTS.—Section 
223(a) of such Code is amended by adding at the 
end the following: ‘‘No amount is allowed as a de-
duction under the preceding sentence for any taxable 
year beginning after one year after the date of the 
enactment of the Family First Medisave Empower-
ment Act.’’. 
(d) ROLLOVER OF FSA, ARCHER MSA, HSA TO 
MEDISAVE ACCOUNT.—Notwithstanding any other provi-
sion of law, if the remaining balance in a health flexible 
spending arrangement, Archer MSA, or Health Savings 
Account is transferred to a Medisave account before the 
end of any taxable year ending on or before one year after 
the date of the enactment of the Family First Medisave 
Empowerment Act, such transfer shall be treated as a roll-
over to the Medisave account under section 530A(e)(5)(B) 
of the Internal Revenue Code of 1986 and the distribution 
from the health flexible spending arrangement, Archer 
MSA, or Health Savings Account shall not be includible 
in gross income. 
(e) CLERICAL AMENDMENTS.—The table of sections 
for part VIII of subchapter F of chapter 1 of such Code 
is amended by adding at the end the following new item: 
‘‘Sec. 530A. Medisave Accounts.’’. 
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(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
one year after the date of the enactment of this Act. 
SEC. 3. TAX CREDIT FOR CONTRIBUTIONS TO MEDISAVE 
ACCOUNT DURING FIRST YEAR. 
(a) IN GENERAL.—In the case of an individual who 
makes a contribution to a Medisave account before the end 
of the 1-year period beginning on the date of the enact-
ment of this Act, there shall be allowed as a credit against 
the tax imposed by subtitle A of the Internal Revenue 
Code of 1986 for the taxable year in which the contribu-
tion is made an amount equal to the aggregate of $1 for 
every $3 contributed to the account (other than a rollover 
contribution under section 530A(e)(5) of such Code) for 
such taxable year. 
(b) LIMITATION.—The aggregate amount allowed to 
an individual as a credit under subsection (a) for all tax-
able years shall not exceed $1,000. 
(c) PORTION OF CREDIT REFUNDABLE.—For pur-
poses of this section— 
(1) IN GENERAL.—For purposes of the Internal 
Revenue Code of 1986, in the case of an eligible in-
dividual— 
(A) INCREASE
IN
CREDIT
RATE.—Sub-
section (a) shall be applied by substituting ‘‘$1 
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for every $1 contributed’’ for ‘‘$1 for every $3 
contributed’’. 
(B) CREDIT REFUNDABLE.—The credit al-
lowed under this section shall be treated in the 
same manner as a credit allowed under subpart 
C of part IV of subchapter A of chapter 1 of 
such Code. 
(2) ELIGIBLE INDIVIDUAL.— 
(A) IN GENERAL.—The term ‘‘eligible indi-
vidual’’ means, with respect to any taxable year, 
a taxpayer whose household income for the tax-
able year does not exceeds 400 percent of an 
amount equal to the poverty line for a family of 
the size involved. 
(B) MARRIED COUPLES MUST FILE JOINT 
RETURN.—If the taxpayer is married (within 
the meaning of section 7703 of such Code) at 
the close of the taxable year— 
(i) the taxpayer shall be treated as an 
eligible individual only if the taxpayer and 
the taxpayer’s spouse file a joint return for 
the taxable year, and 
(ii) paragraph (1) shall be applied 
separately to each spouse. 
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(3) FAMILY SIZE, HOUSEHOLD INCOME, MODI-
FIED ADJUSTED GROSS INCOME, POVERTY LINE.— 
The terms ‘‘family size’’, ‘‘household income’’, 
‘‘modified adjusted gross income’’, and ‘‘poverty 
line’’ have the meaning given such terms by section 
36B(d) of such Code. 
(d) DENIAL OF CREDIT TO DEPENDENTS.—No cred-
it shall be allowed under this section to any individual with 
respect to whom a deduction under section 151 is allow-
able to another taxpayer for a taxable year beginning in 
the calendar year in which such individual’s taxable year 
begins. 
SEC. 4. ALTERNATIVE WAIVER FOR STATE INNOVATION; 
COST-SHARING REDUCTION PAYMENTS. 
(a) ALTERNATIVE WAIVER
FOR STATE INNOVA-
TION.—Section 1332 of the Patient Protection and Af-
fordable Care Act (42 U.S.C. 18052) is amended by add-
ing at the end the following new subsection: 
‘‘(f) ALTERNATIVE WAIVER
FOR STATE INNOVA-
TION.— 
‘‘(1) IN GENERAL.—Notwithstanding any pre-
ceding provision of this section, a State may apply 
to the Secretary for the waiver of any requirement 
of subsection (a)(2) with respect to health insurance 
coverage within that State for plan years beginning 
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on or after January 1, 2022, if instead of complying 
with section 1402 the State provides for the dis-
tribution of funding received under paragraph (2) to 
Medisave accounts of qualifying individuals with re-
spect to such State. Such application shall be filed 
at such time and in such manner as the Secretary 
may require, and shall include such information as 
the Secretary may require (including a 10-year 
budget plan for such plan that is budget neutral for 
the Federal Government). 
‘‘(2) PASS-THROUGH FUNDING.—With respect 
to a State waiver under paragraph (1), under which, 
due to the structure of such waiver, individuals in 
the State would not qualify for cost-sharing reduc-
tions under section 1402 for which they would other-
wise be eligible, the Secretary shall provide for an al-
ternative means by which an amount is transferred 
to the State equal to the aggregate amount of such 
reductions that would have been paid on behalf of 
the participants in the Exchanges established under 
this title— 
‘‘(A) had the State not received such waiv-
er; 
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‘‘(B) had references to ‘eligible insureds’ 
under section 1402 referred to ‘qualifying in-
sureds (as defined in section 1332(f))’; and 
‘‘(C) had, after application of clause (ii), in 
the case of a qualifying insured enrolled in the 
bronze level of coverage— 
‘‘(i) the percentages specified in sub-
clauses (I), (II), and (III) of section 
1402(c)(1)(B) were references to 84 per-
cent, 77 percent, and 63 percent, respec-
tively; and 
‘‘(ii) the references in subparagraphs 
(A), (B), and (C) of section 1402(c)(2) to 
94 percent, 87 percent, and 73 percent, re-
spectively, were references to 84 percent, 
77 percent, and 63 percent, respectively. 
The amount transferred pursuant to the previous 
sentence shall be determined annually by the Sec-
retary, taking into consideration the experience of 
other States with respect to participation in an Ex-
change and reductions provided under such provi-
sions to residents of the other States, and shall be 
paid to the State for purposes of implementing such 
waiver. 
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‘‘(3) WAIVER
CONSIDERATION
AND
TRANS-
PARENCY.—The provisions of paragraph (4) of sub-
section (a) shall apply to an application for a waiver 
under paragraph (1) in the same manner as such 
provisions apply with respect to an application for a 
waiver under subsection (a)(1), except that, for pur-
poses of this paragraph, the provisions of subsection 
(a)(4)(B)(ii) shall not apply. 
‘‘(4) DETERMINATIONS; TERM
OF
WAIVER.— 
The provisions of subsections (d) and (e) shall apply 
with respect to a determination with respect to an 
application under paragraph (1), and with respect to 
the term of a waiver under such paragraph, in the 
same manner as such provisions apply with respect 
to a determination with respect to an application 
under subsection (a)(1), and with respect to the 
term of a waiver under such subsection. 
‘‘(5) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) MEDISAVE
ACCOUNT.—The term 
‘Medisave account’ has the meaning given such 
term in section 530A(a) of the Internal Rev-
enue Code of 1986. 
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‘‘(B) QUALIFYING
INSURED.—The term 
‘qualifying insured’ means, with respect to a 
State and a year, an individual— 
‘‘(i) who is enrolled in a Medisave ac-
count; 
‘‘(ii) who is enrolled for such year in 
a silver level or bronze level coverage of-
fered through an Exchange; and 
‘‘(iii) whose household income is not 
less than 100 percent but not more than 
250 percent of the Federal poverty line for 
a family of the size involved.’’. 
(b) CONFORMING AMENDMENTS.—Section 1332 of 
the Patient Protection and Affordable Care Act (42 
U.S.C. 18052), as amended by subsection (a), is further 
amended in subsection (a)(4)— 
(1) in subparagraph (A) by striking the period 
and inserting ‘‘, except in the case of a waiver de-
scribed in subsection (f).’’; and 
(2) in subparagraph (B)(ii) by inserting after 
‘‘an application’’ the following: ‘‘(except in the case 
of a waiver described in subsection (f))’’. 
(c) 
APPROPRIATION
FOR
COST-SHARING
PAY-
MENTS.—Section 1402 of the Patient Protection and Af-
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fordable Care Act (42 U.S.C. 18071) is amended by add-
ing at the end the following new subsection: 
‘‘(g) FUNDING.— 
‘‘(1) APPROPRIATIONS.—Out of any funds in 
the Treasury not otherwise appropriated, there is 
appropriated such sums as may be necessary to, 
subject to paragraph (2), provide health benefits 
coverage through payment to issuers (under this sec-
tion or through advance payment by the Secretary 
of the Treasury under section 1412(c)(3)) of the 
amounts computed under this section for each of 
plan years 2022 through 2026. 
‘‘(2) 
ADJUSTMENTS.—Notwithstanding 
any 
other provision of law, payments and other actions 
for adjustments to obligations incurred prior to De-
cember 31, 2022, may be made through December 
31, 2022. 
‘‘(3) 
LIMITATION.—Amounts 
appropriated 
under paragraph (1) for each of plan years 2022 
through 2026 are subject to the requirements and 
limitations under sections 506 and 507 of division H 
of Public Law 115–31 in the same manner and to 
the same extent as if such amounts for each such 
year were appropriated under such division.’’. 
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SEC. 5. GRANTS FOR MEDISAVE ASSISTANCE AND OUT-
REACH. 
(a) IN GENERAL.—The Administrator shall establish 
a grant program to provide assistance to eligible entities 
to carry out the activities described in subsection (c). 
(b) APPLICATION.—An eligible entity shall submit an 
application to the Administrator in such time and in such 
manner as the Administrator may require, providing that 
such application requires a demonstration of the existence 
of a relationship with, or the ability to establish a relation-
ship with, an employer, employee, self-employed indi-
vidual, or consumer eligible to enroll in a Medisave ac-
count. 
(c) USE OF FUNDS.—An eligible entity receiving a 
grant under this section shall use such funds to— 
(1) distribute fair and impartial information to 
consumers about Medisave accounts, including the 
availability of such accounts and how such accounts 
may be utilized; 
(2) conduct activities to raise public awareness 
of Medisave accounts; 
(3) facilitate enrollment in Medisave accounts; 
and 
(4) refer individuals enrolled in a Medisave ac-
count to the appropriate official, organization, or 
State agency for the purpose of addressing a com-
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plaint, grievance, or other question with respect to 
such Medisave account. 
(d) AMOUNT.—The Administrator may distribute up 
to $5,000,000 annually to be divided among grant recipi-
ents under this section. 
(e) REPORT.—Not later than one year after the date 
on which the last of the grant periods awarded under this 
section ends, the Administrator shall submit a report to 
the Congress on the effectiveness of the grants provided 
under this section. 
(f) DEFINITIONS.—In this section: 
(1) ADMINISTRATOR.—The term ‘‘Adminis-
trator’’ means the Administrator of the Centers for 
Medicare & Medicaid Services. 
(2) CONSUMER.—The term ‘‘consumer’’ means 
an individual enrolled in, or seeking to enroll in, a 
Medisave account. 
(3) ELIGIBLE ENTITY.—The term ‘‘eligible enti-
ty’’ includes the following: 
(A) A State. 
(B) Trade. 
(C) Industry. 
(D) Professional associations. 
(E) Commercial fishing industry organiza-
tions. 
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(F) Ranching and farming organizations. 
(G) Community and consumer-focused 
nonprofit groups. 
(H) Chambers of commerce. 
(I) Unions. 
(J) Small business development centers (as 
defined in section 21 of the Small Business Act 
(15 U.S.C. 648)). 
(K) Other entities capable of carrying out 
the activities described under subsection (b). 
(4) MEDISAVE ACCOUNT.—The term ‘‘Medisave 
account’’ has the meaning given such term in section 
530A(a) of the Internal Revenue Code of 1986 (as 
added by section 2(a)). 
(5) STATE.—The term ‘‘State’’ means each of 
the several States, the District of Columbia, each 
territory and possession of the United States, and 
each federally recognized Indian Tribe. 
Æ 
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