Title: Family Savings Flexibility Act
Policy area: Taxation

Summary:
Family Savings Flexibility Act
This bill (1) increases to $2,750 the maximum amount of unused benefits or contributions remaining in a health flexible or dependent care spending arrangement that may be carried over from the 2020 to the 2021 plan year, (2) increases the maximum contribution amount for health savings accounts, and (3) increases for taxable years beginning in 2020, the exclusion from employee gross income of employer-paid dependent care assistance.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7008 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 7008

 To amend the Internal Revenue Code of 1986 to provide flexibility for 
families with health flexible spending arrangements and dependent care 
        flexible spending arrangements, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 22, 2020

 Mr. Wenstrup (for himself, Mrs. Axne, and Mr. Kelly of Pennsylvania) 
 introduced the following bill; which was referred to the Committee on 
                             Ways and Means

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to provide flexibility for 
families with health flexible spending arrangements and dependent care 
        flexible spending arrangements, 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 ``Family Savings Flexibility Act''.

SEC. 2. INCREASE IN CARRYOVER FOR HEALTH FLEXIBLE SPENDING 
              ARRANGEMENTS.

    (a) In General.--A plan or other arrangement that otherwise 
satisfies all of the applicable requirements of sections 106 and 125 of 
the Internal Revenue Code of 1986 (including any rules or regulations 
thereunder) shall not fail to be treated as a cafeteria plan or health 
flexible spending arrangement merely because such plan or arrangement 
permits participants to carry over an amount not in excess of $2,750 of 
unused benefits or contributions remaining in a health flexible 
spending arrangement from the plan year ending in 2020 to the plan year 
ending in 2021.
    (b) Definitions.--Any term used in this section which is also used 
in section 106 or 125 of the Internal Revenue Code of 1986 or the rules 
or regulations there under shall have the same meaning as when used in 
such section or rules or regulations.

SEC. 3. CARRYOVER FOR DEPENDENT CARE FLEXIBLE SPENDING ARRANGEMENTS.

    (a) In General.--A plan or other arrangement that otherwise 
satisfies all applicable requirements of sections 106, 125, and 129 of 
the Internal Revenue Code of 1986 (including any rules or regulations 
thereunder) shall not fail to be treated as a cafeteria plan or 
dependent care flexible spending arrangement merely because such plan 
or arrangement permits participants to carry over (under rules similar 
to the rules applicable to health flexible spending arrangements) an 
amount, not in excess of the amount in effect under section 
129(a)(2)(A) of such Code, of unused benefits or contributions 
remaining in a dependent care flexible spending arrangement from the 
plan year ending in 2020 to the plan year ending in 2021.
    (b) Definitions.--Any term used in this section which is also used 
in section 106, 125, or 129 of the Internal Revenue Code of 1986 or the 
rules or regulations thereunder shall have the same meaning as when 
used in such section or rules or regulations.

SEC. 4. MAXIMUM CONTRIBUTION LIMIT TO HEALTH SAVINGS ACCOUNT INCREASED 
              TO AMOUNT OF DEDUCTIBLE AND 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)(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)''.
    (c) Conforming Amendment.--Section 223(g)(1) of such Code is 
amended by striking ``subsections (b)(2) and'' both places it appears 
and inserting ``subsection''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2019.

SEC. 5. INCREASE IN EXCLUSION FOR EMPLOYER-PROVIDED DEPENDENT CARE 
              ASSISTANCE.

    (a) In General.--Section 129(a)(2) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new subparagraph:
                    ``(D) Special rule for 2020.--In the case of any 
                taxable year beginning during 2020, subparagraph (A) 
                shall be applied by substituting `$10,000 (half such 
                dollar amount' for `$5,000 ($2,500'.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2019.
    (c) Retroactive Plan Amendments.--A plan or other arrangement that 
otherwise satisfies all applicable requirements of sections 106, 125, 
and 129 of the Internal Revenue Code of 1986 (including any rules or 
regulations thereunder) shall not fail to be treated as a cafeteria 
plan or dependent care flexible spending arrangement merely because 
such plan or arrangement is amended pursuant to a provision under this 
section and such amendment is retroactive, if--
            (1) such amendment is adopted no later than the last day of 
        the plan year in which the amendment is effective, and
            (2) the plan or arrangement is operated consistent with the 
        terms of such amendment during the period beginning on the 
        effective date of the amendment and ending on the date the 
        amendment is adopted.
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