Health Savings Act of 2017

Bill: 115-hr-35
Sponsor: full_name: Rep. Burgess, Michael C. [R-TX-26]
Introduced: 2017-01-03
Policy area: Taxation
Subjects: Bankruptcy

Child health

Employee benefits and pensions

Health care costs and insurance

Health care coverage and access

Income tax deductions

Income tax exclusion

Tax treatment of families
Latest action: action_date: 2017-01-12
text: Referred to the Subcommittee on Regulatory Reform, Commercial And Antitrust Law.

Summaries:
action_date: 2017-01-03
action_desc: Introduced in House
text: <p><strong>Health Savings Act of 201</strong><b>7</b></p> <p>This bill amends the Internal Revenue Code, with respect to health savings accounts (HSAs), to: (1) allow an additional tax deduction for amounts paid to the HSA of a taxpayer's child or grandchild; (2) allow a rollover of HSA funds to the child, parent, or grandparent of an account holder; (3) increase the maximum HSA contribution limit to match the amount of the deductible and out-of-pocket expenses under a high deductible health plan; and (4) expand the definition of an HSA compatible plan to include bronze, silver, and catastrophic plans on an insurance exchange.</p> <p>The bill also amends the federal bankruptcy code to treat HSAs in the same manner as individual retirement accounts for purposes of determining exemptions from the bankruptcy estate.</p>

tv_txt: I 115th CONGRESS 1st Session H. R. 35 IN THE HOUSE OF REPRESENTATIVES January 3, 2017 Mr. Burgess (for himself, Mr. Sanford , and Mr. Carter of Texas ) introduced the following bill; which was referred to the Committee on Ways and Means , and in addition to the Committees on the Judiciary , and 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 modify rules relating to health savings accounts.

1. Short title; table of contents (a) Short title This Act may be cited as the Health Savings Act of 2017 . (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Health savings accounts for children. Sec. 3. Allowing HSA rollover to child or parent of account holder. Sec. 4. Maximum contribution limit to HSA increased to amount of deductible and out-of-pocket limitation. Sec. 5. Equivalent bankruptcy protections for health savings accounts as retirement funds. Sec. 6. Allowance of silver and bronze plans in connection with health savings accounts. Sec. 7. Identification of HSA compatible plans. 2. Health savings accounts for children (a) In general Section 223 of the Internal Revenue Code of 1986 is amended by redesignating subsection (h) as subsection (i) and by inserting after subsection (g) the following new subsection: (h) Child health savings accounts (1) In general In the case of an individual, in addition to any deduction allowed under subsection (a) for any taxable year, there shall be allowed as a deduction under this section an amount equal to the aggregate amount paid in cash by the taxpayer during the taxable year to a child health savings account of a child or grandchild of the taxpayer. (2) Limitations (A) Deduction limitation The amount taken into account under paragraph (1) with respect to each child or grandchild of the taxpayer, as the case may be, for the taxable year shall not exceed the sum of the monthly limitations with respect to such child for months during the taxable year that the child is an eligible individual. (B) Limit on accounts with respect to individual The aggregate amount of contributions which may be made for any taxable year to all child health savings accounts established and maintained on behalf of a child shall not exceed the sum of the monthly limitations for months during the taxable year that the child is an eligible individual. (C) Monthly limitation The monthly limitation for any month with respect to a child is 1/12 of the amount in effect for the taxable year under subsection (c)(2)(A)(ii)(I). (3) Treatment of account while a dependent For purposes of this section, except as otherwise provided in this subsection, a child health savings account established for the benefit of the child of a taxpayer shall be treated as a health savings account of the taxpayer until the first taxable year (and each taxable year thereafter) for which no deduction under section 151 is allowable to any taxpayer with respect to such child, after which such account shall be treated as a health savings account of the child. The preceding sentence shall not apply for purposes of applying the limitations in subsection (b) to a health savings account of the taxpayer. (4) Child health savings account For purposes of this subsection, the term child health savings account means a health savings account designated as a child health savings account and established for the benefit of a child of a taxpayer. (5) Qualified medical expenses For purposes of this section, the term qualified medical expenses shall, with respect to any child health savings account, not include any amounts paid for medical care (as defined in section 213(d)) for any individual other than the child for whose benefit the account is maintained. (6) Exceptions for disability or death of child If the child becomes disabled within the meaning of section 72(m)(7) or dies— (A) subsection (f)(4)(A) shall not apply to any subsequent payment or distribution, and (B) the taxpayer may rollover the amount in such account to any health savings account of the taxpayer or grandparent of the child or to any child health savings account of any other child of the taxpayer. (7) Guardians Any legal guardian of a child shall be treated as the parent of such child for purposes of this section. (8) Regulations The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection, including rules for determining application of this subsection in the case of legal guardians and in the case of parents of a child who file separately, are separated, or are not married. . (b) Coordination with means-Tested programs Amounts in a child health savings account shall not be taken into account in determining resources for purposes of title XIX of the Social Security Act. (c) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 3. Allowing HSA rollover to child or parent of account holder (a) In general Subparagraph (A) of section 223(f)(8) of the Internal Revenue Code of 1986 is amended— (1) by inserting child, parent, or grandparent after surviving spouse , (2) by inserting child, parent, or grandparent, as the case may be, after the spouse , (3) by inserting , child, parent, or grandparent after spouse in the heading thereof, and (4) by adding at the end the following: In the case of a child who acquires such beneficiary’s interest and with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins, such health savings account shall be treated as a child health savings account of the child. . (b) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 4. Maximum contribution limit to HSA increased to amount of deductible and out-of-pocket limitation (a) Self-Only coverage Subparagraph (A) of section 223(b)(2) 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 Subparagraph (B) of section 223(b)(2) 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 and inserting subsection . (d) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 5. Equivalent bankruptcy protections for health savings accounts as retirement funds (a) In general Section 522 of title 11, United States Code, is amended by adding at the end the following new subsection: (r) For purposes of this section, any health savings account (as described in section 223 of the Internal Revenue Code of 1986) shall be treated in the same manner as an individual retirement account described in section 408 of such Code. . (b) Effective date The amendment made by this section shall apply to cases commencing under title 11, United States Code, after the date of the enactment of this Act. 6. Allowance of silver and bronze plans in connection with health savings accounts (a) In general Section 223 of the Internal Revenue Code of 1986 is amended— (1) by striking a high deductible health plan each place it appears and inserting an HSA compatible health plan , (2) by striking high deductible health plan in subsection (b)(8)(A)(ii) and inserting HSA compatible health plan , and (3) by striking the high deductible health plan in subsection (c)(1)(A)(ii)(II) and inserting the HSA compatible health plan . (b) HSA compatible health plan defined Paragraph (2) of section 223(c) of such Code is amended by redesignating subparagraphs (A), (B), (C), and (D) as subparagraphs (B), (C), (D), and (E) and by inserting before subparagraph (B), as so redesignated, the following new subparagraph: (A) In general The term HSA compatible health plan means— (i) any high deductible health plan, (ii) any plan described in section 1302(e) of the Patient Protection and Affordable Care Act ( 42 U.S.C. 18022(e) ) (relating to catastrophic plan), or (iii) any silver or bronze plan which was enrolled in through an Exchange established under section 1311 or section 1321 of the Patient Protection and Affordable Care Act ( 42 U.S.C. 1311 , 18041). . (c) Clerical amendments Section 223 of such Code is amended— (1) by striking In general in the heading for subsection (c)(2)(B), as redesignated by subsection (b) of this Act, and inserting High deductible health plan , (2) by striking high deductible health plan in the heading for subsection (b)(8)(B) and inserting hsa compatible health plan , and (3) by striking High deductible health plan in the heading for subsection (c)(2) and inserting HSA compatible health plan . (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2017. 7. Identification of HSA compatible plans Section 1103(b) of the Patient Protection and Affordable Care Act ( 42 U.S.C. 18003(b) ) is amended by adding at the end the following new paragraph: (3) Identification of HSA compatible plans Beginning for plan year 2018, the format described in paragraph (1) shall require that information on a coverage option described in subsection (a)(2) that is an HSA compatible health plan (as defined in section 223(c)(2) of the Internal Revenue Code of 1986) identifies such plan as a plan that satisfies the requirement of section 223(c)(1)(A)(i) of such Code. .