Title: Health Savings Modernization Act of 2018
Policy area: Taxation

Summary:
Health Savings Modernization Act of 2018
This bill modifies the requirements for tax-favored health savings accounts (HSAs) to:
The bill also eliminates provisions in the Patient Protection and Affordable Care Act that restrict the individuals who may purchase catastrophic health plans. (Under current law, the plans are limited to individuals who are younger than 30 years of age or who have a hardship exemption.)

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6937 Introduced in House (IH)]

<DOC>






115th CONGRESS
  2d Session
                                H. R. 6937

 To amend the Internal Revenue Code of 1986 to improve health savings 
                   accounts, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 27, 2018

 Mr. Bera (for himself and Ms. Kuster of New Hampshire) introduced the 
following 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 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to improve health savings 
                   accounts, and for other purposes.

    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 Modernization Act of 
2018''.

SEC. 2. HIGH DEDUCTIBLE PLAN SAFE HARBOR FOR ABSENCE OF DEDUCTIBLE FOR 
              CERTAIN COVERAGE.

    (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:
                    ``(E) Safe harbor for absence of deductible for 
                certain other care.--A plan shall not fail to be 
                treated as a high deductible health plan by reason of 
                failing to have a deductible for--
                            ``(i) a defined number of visits for 
                        outpatient primary care, mental health care, 
                        behavioral health care, or urgent care, or
                            ``(ii) a generic or preferred prescription 
                        drug formulary.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to plan years beginning after the date of the enactment of this Act.

SEC. 3. MEDICAL EXPENSES OF YOUNG ADULT CHILDREN.

    (a) In General.--The first sentence of section 223(d)(2)(A) of the 
Internal Revenue Code of 1986 is amended by striking ``and any 
dependent'' and all that follows through ``thereof) of such 
individual'' and inserting ``and any child (as defined in section 
152(f)(1)) of such individual who as of the end of the taxable year has 
not attained age 27''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 4. EXCESS HEALTH INSURANCE COVERAGE CREDIT PAYABLE TO HEALTH 
              SAVINGS ACCOUNT.

    (a) In General.--Chapter 77 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following:

``SEC. 7529. EXCESS HEALTH INSURANCE COVERAGE CREDIT PAYABLE TO HEALTH 
              SAVINGS ACCOUNT.

    ``(a) In General.--At the request of an eligible taxpayer, the 
Secretary shall make a payment to the trustee of the designated health 
savings account with respect to such taxpayer in an amount equal to the 
sum of the excesses (if any) described in subsection (c)(2) with 
respect to months in the taxable year.
    ``(b) Designated Health Savings Account.--The term `designated 
health savings account' means a health savings account of an individual 
described in subsection (c)(3) which is identified by the eligible 
taxpayer for purposes of this section.
    ``(c) Eligible Taxpayer.--The term `eligible taxpayer' means, with 
respect to any taxable year, any taxpayer if--
            ``(1) such taxpayer is allowed a credit under section 36B 
        for such taxable year,
            ``(2) the amount described in subparagraph (B) of section 
        36B(b)(2) exceeds the amount described in subparagraph (A) of 
        such section with respect to such taxpayer applied with respect 
        to any month during such taxable year, and
            ``(3) the taxpayer, the taxpayer's spouse, or any dependent 
        (as defined in section 152) of the taxpayer were eligible 
        individuals (as defined in section 223(c)(1)) for one or more 
        months during such taxable year.
    ``(d) Contributions Treated as Rollovers, etc.--
            ``(1) In general.--Any amount paid the Secretary to a 
        health savings account under this section shall be treated for 
        purposes of this title in the same manner as a rollover 
        contribution described in section 223(f)(5).
            ``(2) Coordination with limitation on rollovers.--Any 
        amount described in paragraph (1) shall not be taken into 
        account in applying section 223(f)(5)(B) with respect to any 
        other amount and the limitation of section 223(f)(5)(B) shall 
        not apply with respect to the application of paragraph (1).
    ``(e) Form and Manner of Request.--The request referred to in 
subsection (a) shall be made at such time and in such form and manner 
as the Secretary may provide. To the extent that the Secretary 
determines feasible, such request may identify more than one designated 
health savings account (and the amount to be paid to each such account) 
provided that the aggregate of such payments with respect to any 
taxpayer for any taxable year do not exceed the excess described in 
subsection (c)(2).
    ``(f) Taxpayers With Seriously Delinquent Tax Debt.--In the case of 
an individual who has a seriously delinquent tax debt (as defined in 
section 7345(b)) which has not been fully satisfied--
            ``(1) if such individual is the eligible taxpayer (or, in 
        the case of a joint return, either spouse), the Secretary shall 
        not make any payment under this section with respect to such 
        taxpayer, and
            ``(2) if such individual is the account beneficiary (as 
        defined in section 223(d)(3)) of any health savings account, 
        the Secretary shall not make any payment under this section to 
        such health savings account.
    ``(g) Advance Payment.--To the extent that the Secretary determines 
feasible, payment under this section may be made in advance on a 
monthly basis under rules similar to the rules under section 1412 of 
the Patient Protection and Affordable Care Act. The Secretary, in 
consultation with the Secretary of Health and Human Services, shall 
issue guidance on Exchanges (established under the Patient Protection 
and Affordable Care Act) facilitating the deposit of amounts to 
designated health savings account under this section.''.
    (b) Conforming Amendments.--
            (1) Section 162(l) of such Code is amended by adding at the 
        end the following new paragraph:
            ``(6) Coordination with health insurance coverage credit.--
        The deduction otherwise allowable to a taxpayer under paragraph 
        (1) for any taxable year shall be reduced (but not below zero) 
        by the sum of--
                    ``(A) the amount of the credit allowable to such 
                taxpayer under section 36B (determined without regard 
                to subsection (f)(1) thereof) for such taxable year, 
                plus
                    ``(B) the aggregate payments made with respect to 
                the taxpayer under section 7529 for months during such 
                taxable year.''.
            (2) Section 1324(b)(2) of title 31, United States Code is 
        amended by striking ``or 6431'' and inserting ``6431, or 
        7529''.
            (3) The table of sections for chapter 77 of such Code is 
        amended by adding at the end the following new items:

``Sec. 7529. Excess Health Insurance Coverage Credit Payable To Health 
                            Savings Account.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to months beginning after the date of the enactment of this Act, 
in taxable years ending after such date.

SEC. 5. ALLOWING ALL INDIVIDUALS PURCHASING HEALTH INSURANCE IN THE 
              INDIVIDUAL MARKET THE OPTION TO PURCHASE A LOWER PREMIUM 
              PLAN.

    (a) In General.--Section 1302(e) of the Patient Protection and 
Affordable Care Act (42 U.S.C. 18022(e)) is amended--
            (1) in paragraph (1)--
                    (A) by redesignating clauses (i) and (ii) of 
                subparagraph (B) as subparagraphs (A) and (B), 
                respectively, and adjusting the margins accordingly;
                    (B) by striking ``plan year if--'' and all that 
                follows through ``the plan provides--'' and inserting 
                ``plan year if the plan provides--''; and
                    (C) in subparagraph (A), as so redesignated, by 
                striking ``clause (ii)'' and inserting ``subparagraph 
                (B)'';
            (2) by striking paragraph (2); and
            (3) by redesignating paragraph (3) as paragraph (2).
    (b) Risk Pools.--Section 1312(c)(1) of the Patient Protection and 
Affordable Care Act (42 U.S.C. 18032(c)(1)) is amended by inserting 
``and including enrollees in plans described in section 1302(e)'' after 
``Exchange''.
    (c) Requirement To Offer Additional Coverage.--Section 2707 of the 
Public Health Service Act (42 U.S.C. 300gg-6) is amended by adding at 
the end the following new subsection:
    ``(e) Limitation on Catastrophic Plans.--A health insurance issuer 
may not offer a catastrophic plan (as defined in subsection (e) of 
section 1302 of the Patient Protection and Affordable Care Act) to an 
individual unless such issuer also offers health insurance coverage to 
such individual that provides either the bronze, silver, gold, or 
platinum level of coverage described in subsection (d) of such 
section.''.
    (d) Conforming Amendment.--Section 1312(d)(3)(C) of the Patient 
Protection and Affordable Care Act (42 U.S.C. 18032(d)(3)(C)) is 
amended by striking ``, except that in the case of a catastrophic plan 
described in section 1302(e), a qualified individual may enroll in the 
plan only if the individual is eligible to enroll in the plan under 
section 1302(e)(2)''.
    (e) Effective Date.--The amendments made by this section shall 
apply with respect to plan years beginning after the date of the 
enactment of this Act.

SEC. 6. HIGH DEDUCTIBLE HEALTH PLAN MAXIMUM OUT-OF-POCKET LIMITATION.

    (a) In General.--Section 223(c)(2)(A)(ii) is amended by striking 
``does not exceed'' and all that follows and inserting ``does not 
exceed the amount in effect under section 1302(c) of the Patient 
Protection and Affordable Care Act''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 7. MAXIMUM CONTRIBUTION LIMIT TO HSA INCREASED TO AMOUNT OF OUT-
              OF-POCKET LIMITATION.

    (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 subsection (c)(2)(A)(ii) with respect to 
self-only coverage''.
    (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) with respect to self-only coverage''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
                                 <all>