2023 Louisiana Laws › Revised Statutes › Title 47 - Revenue and Taxation › §47:297.1. Tax deduction; medical savings accounts

RS 47:297.1 - Tax deduction; medical savings accounts
A. There shall be allowed a deduction from tax table income for contributions to a medical savings account as provided in this Section. Contributions to a medical savings account for a taxable year shall not exceed the allowable deduction for a qualified higher deductible health plan.
B. For purposes of this Section, the following words and phrases shall have the respective meanings ascribed to them in this Subsection:
(1) "Account administrator" shall mean a state or national bank, savings and loan association, credit union as those terms are defined in R.S. 6:2, or a savings bank chartered pursuant to the Louisiana Savings Bank Act of 1990.1 Account administrator shall also mean an insurer as that term is defined in R.S. 22:5, a health maintenance organization as defined in R.S. 22:2002(7), a group purchaser as defined in R.S. 40:2202(3), a third party administrator licensed pursuant to R.S. 22:3031 et seq., and an employer, if the employer has a self-insured health plan meeting federal ERISA requirements.
(2) "Account holder" means a resident individual or an employee for whose benefit a medical savings account is established.
(3) "Dependent" means the spouse of an account holder or minor child of an account holder or any other person required to be covered as a dependent on an accident and health insurance policy or a health maintenance organization contract or certificate under the Louisiana Insurance Code.2
(4) "Eligible medical expense" means an expense payable by a taxpayer for medical care as provided in Section 213(d) of the Internal Revenue Code.3
(5) "Higher deductible" means an annual deductible of not less than one thousand five hundred dollars, but not more than two thousand two hundred fifty dollars for individual health coverage, and not less than three thousand dollars, but not more than four thousand five hundred dollars for health coverage provided to an individual and his or her dependents. Such deductible limits thereafter shall be adjusted annually for increases in the cost of living, as measured by the medical costs component of the Consumer Price Index.
(6) "Medical savings account" means an account established to procure health coverage for or to pay eligible medical expenses of the account holder and his or her dependents.
(7) "Medical savings account program" means a program that includes all of the following:
(a) The purchase by an employer of a qualified higher deductible health plan for the benefit of an employee and his or her dependents or the purchase by a resident individual of a qualified higher deductible health plan for his or her benefit or for the benefit of his or her dependents, or both.
(b) The payment on behalf of an employee into a medical savings account by his or her employer or payment into a medical savings account by a resident individual on his or her behalf.
(c) An account administrator to administer the medical savings account and the reimbursement of eligible medical expenses or premiums for health coverage therefrom.
(8) "Qualified higher deductible health plan" means any hospital, health, or medical expense insurance policy, hospital or medical service contract, health and accident insurance policy, or any other contract of this type, including a group insurance plan, or any policy of family group, blanket, or franchise health and accident insurance, a self-insurance plan, an employee welfare plan, and a health maintenance organization subscriber agreement, all as defined in Title 22 of the Louisiana Revised Statutes of 1950 that provides for payment of covered expenses that exceed the higher deductible and that is purchased by:
(a) An employer for the benefit of an employee.
(b) A resident individual for his or her benefit.
(9) "Resident individual" means an individual who has a domicile in this state.
C.(1) Each employer shall be permitted to offer voluntarily the following programs:
(a) Continued coverage under the employer's existing health coverage policy, certificate, or contract.
(b) Participation in a medical savings account program.
(2) An employer that previously did not grant an accident and health insurance policy, certificate, or contract or coverage under any other health plan, including a plan of a health maintenance organization for his or her employees may establish a medical savings account program.
(3) A resident individual may establish a medical savings account for the benefit of himself or herself and his or her dependents.
D.(1) Except as otherwise provided in Subsection E of this Section, an account administrator shall use the funds held in a medical savings account solely for the purpose of paying eligible medical expenses of the account holder, or his or her dependent, or to pay for an accident and health insurance policy, certificate, or contract, or coverage under any other health plan, including a plan of a health maintenance organization if the account holder would not otherwise have such coverage.
(2) The account holder may submit documentation for premiums for any health plan or eligible medical expenses, or both, paid by the account holder during a tax year to the account administrator, and the account administrator shall reimburse the account holder for the eligible medical expense or premiums for any health plan, or both, out of the medical savings account.
(3) Upon the death of the account holder, the account administrator shall distribute the principal and accumulated interest of the medical savings account to the estate of the account holder, unless the account holder has designated a beneficiary in writing to the account administrator, in which case the account administrator shall make such distribution to the designated beneficiary.
E. Unencumbered funds that have accumulated in a medical savings account that are in excess of the higher deductible may be withdrawn by the account holder for purposes other than paying eligible medical expenses or procuring health coverage. Money withdrawn pursuant to this Section shall be included in tax table income.
Acts 1996, No. 11, §1, eff. for taxable periods beginning after Dec. 31, 1995 and ending on Jan. 1, 1997; Acts 1997, No. 308, §2, eff. June 17, 1997.
1R.S. 6:1131 et seq.
2R.S. 22:1 et seq.
3R.S. 26 U.S.C.A. §213(d)