Health Savings for Seniors Act
Bill: H.R.7435 | Sponsor: Rep. Bera, Ami (D-CA)
Policy area: Taxation

Summary:
Health Savings for Seniors Act
This bill permits a Medicare beneficiary to participate in and contribute to health savings accounts.

To amend the Internal Revenue Code of 1986 to provide that coverage 
 under Medicare is permissible for purposes of contributions to health 
                           savings accounts.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Health Savings for Seniors Act''.

SEC. 2. COVERAGE UNDER MEDICARE PERMISSIBLE FOR PURPOSES OF 
              CONTRIBUTIONS TO HEALTH SAVINGS ACCOUNTS.

    (a) Medicare Made an HSA-Eligible Plan.--
            (1) In general.--Subparagraph (A) of section 223(c)(2) of 
        the Internal Revenue Code of 1986 is amended to read as 
        follows:
                    ``(A) In general.--The term `HSA-qualified health 
                plan' means--
                            ``(i) a health plan--
                                    ``(I) which has an annual 
                                deductible which is not less than--
                                            ``(aa) $1,000 for self-only 
                                        coverage, and
                                            ``(bb) twice the dollar 
                                        amount in item (aa) for family 
                                        coverage, and
                                    ``(II) the sum of the annual 
                                deductible and the other annual out-of-
                                pocket expenses required to be paid 
                                under the plan (other than for 
                                premiums) for covered benefits does not 
                                exceed--
                                            ``(aa) $5,000 for self-only 
                                        coverage, and
                                            ``(bb) twice the dollar 
                                        amount in item (aa) for family 
                                        coverage, and
                            ``(ii) in the case of an individual 
                        enrolled under title XVIII of the Social 
                        Security Act, coverage under title XVIII of 
                        such Act.''.
            (2) Eligible individual.--Paragraph (1) of section 223(c) 
        of such Code is amended by adding at the end the following:
                    ``(G) Special rule for individuals enrolled in 
                medicare.--An individual enrolled under title XVIII of 
                the Social Security Act shall not fail to be treated as 
                an eligible individual for any period merely because 
                the individual during such period is covered under a 
                health plan described in subclauses (I) and (II) of 
                subparagraph (A)(ii).''.
            (3) Exclusion of medicare premiums as qualified medical 
        expense.--Subparagraph (C) of section 223(d)(2) of such Code is 
        amended by inserting ``or'' at the end of clause (ii), by 
        striking ``or'' at the end of clause (iii) and inserting a 
        period, and by striking clause (iv).
            (4) Repeal of exception to additional tax after medicare 
        eligibility.--Paragraph (4) of section 223(f) of such Code is 
        amended by striking subparagraph (C).
            (5) Additional conforming amendments.--
                    (A) In general.--Section 223 of such Code is 
                amended by striking ``high deductible health plan'' 
                each place it appears in the text and inserting ``HSA-
                qualified health plan''.
                    (B) Conforming amendments.--
                            (i) The heading for paragraph (2) of 
                        section 223(c) of such Code is amended by 
                        striking ``High deductible health plan'' and 
                        inserting ``HSA-qualified health plan''.
                            (ii) Section 408(d)(9) of such Code is 
                        amended--
                                    (I) by striking ``high deductible 
                                health plan'' each place it appears in 
                                the text in subparagraph (C) and 
                                inserting ``HSA-qualified health 
                                plan''; and
                                    (II) by striking ``High deductible 
                                health plan'' in the heading of 
                                subparagraph (D) and inserting ``HSA-
                                qualified health plan''.
                            (iii) Section 106(e) of such Code is 
                        amended--
                                    (I) by striking ``High deductible 
                                health plan'' in the heading of 
                                paragraph (3) and inserting ``HSA-
                                qualified health plan''; and
                                    (II) by striking ``high deductible 
                                health plan'' in paragraph (5)(B)(ii) 
                                and inserting ``HSA-qualified health 
                                plan''.
    (b) Repeal of Medicare Limitation on Deduction for Contributions.--
            (1) In general.--Subsection (b) of section 223 of such Code 
        is amended by striking paragraph (7) and redesignating 
        paragraph (8) as paragraph (7).
            (2) Conforming amendment.--Section 26(b)(2)(S) of such Code 
        is amended by striking ``223(b)(8)(B)(i)(II),'' and inserting 
        ``223(b)(7)(B)(i)(II),''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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