H.R. 5858 (112th): Health Savings Accounts Improvements Act of 2012

112th Congress, 2011–2013. Text as of May 29, 2012 (Reported by House Committee).

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IB

Union Calendar No. 365

112th CONGRESS

2d Session

H. R. 5858

[Report No. 112–517]

IN THE HOUSE OF REPRESENTATIVES

May 29, 2012

introduced the following bill; which was referred to the Committee on Ways and Means

June 5, 2012

Additional sponsor: Mrs. Black

June 5, 2012

Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed

Strike out all after the enacting clause and insert the part printed in italic

For text of introduced bill, see copy of bill as introduced on May 29, 2012


A BILL

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


1.

Short title, etc

(a)

Short title

This Act may be cited as the Health Savings Accounts Improvements Act of 2012.

(b)

Table of contents

The table of contents for this Act is as follows:

Sec. 1. Short title, etc.

Sec. 2. Saver’s credit for contributions to health savings accounts.

Sec. 3. Special rule for certain medical expenses incurred before establishment of account.

Sec. 4. Allow both spouses to make catch-up contributions to the same health savings account.

Sec. 5. Individuals eligible for veterans benefits for a service-connected disability.

Sec. 6. Distributions by certain early retirees for health coverage treated as qualified medical expense.

2.

Saver’s credit for contributions to health savings accounts

(a)

Allowance of credit

Subsection (a) of section 25B of the Internal Revenue Code of 1986 is amended by inserting aggregate qualified HSA contributions and after so much of the.

(b)

Qualified HSA contributions

Subsection (d) of section 25B of such Code is amended by redesignating paragraph (2) as paragraph (3) and by inserting after paragraph (1) the following new paragraph:

(2)

Qualified HSA contributions

The term qualified HSA contribution means, with respect to any taxable year, any contribution to a health savings account (as defined in section 223(d)(1)) if—

(A)

such contribution is allowable as a deduction to the taxpayer under section 223(a) for such taxable year, or

(B)

such contribution is made by an employer of the taxpayer at the election of the taxpayer under a cafeteria plan (as defined in section 125(d)) and is not includible in the gross income of the taxpayer by reason of section 125.

.

(c)

Reporting of HSA elective contributions

Paragraph (12) of section 6051(a) of such Code is amended to read as follows:

(12)

the total amount contributed to health savings accounts (as defined in section 223(d)) of the employee or the employee’s spouse and the portion of such total amount contributed at the election of the employee under any cafeteria plan (as defined in section 125(d)),

.

(d)

Conforming amendments

Section 25B(d)(3) of such Code, as redesignated by subsection (b), is amended—

(1)

by striking the first sentence of subparagraph (A) and inserting the following: The aggregate qualified retirement savings contributions determined under paragraph (1) and qualified HSA contributions determined under paragraph (2) shall be reduced (but not below zero) by the aggregate distributions received by the individual during the testing period from any entity of a type to which contributions under paragraph (1) or paragraph (2) (as the case may be) may be made., and

(2)

by inserting 223(f)(1) or (3), after section 72(p), in subparagraph (C)(i).

(e)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2012.

3.

Special rule for certain medical expenses incurred before establishment of account

(a)

In general

Paragraph (2) of section 223(d) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

(D)

Treatment of certain medical expenses incurred before establishment of account

If a health savings account is established during the 60-day period beginning on the date that coverage of the account beneficiary under a high deductible health plan begins, then, solely for purposes of determining whether an amount paid is used for a qualified medical expense, such account shall be treated as having been established on the date that such coverage begins.

.

(b)

Effective date

The amendment made by this section shall apply with respect to coverage beginning after the date of the enactment of this Act.

4.

Allow both spouses to make catch-up contributions to the same health savings account

(a)

In general

Paragraph (5) of section 223(b) of the Internal Revenue Code of 1986 is amended to read as follows:

(5)

Special rule for married individuals with family coverage

(A)

In general

In the case of individuals who are married to each other, if both spouses are eligible individuals and either spouse has family coverage under a high deductible health plan as of the first day of any month—

(i)

the limitation under paragraph (1) shall be applied by not taking into account any other high deductible health plan coverage of either spouse (and if such spouses both have family coverage under separate high deductible health plans, only one such coverage shall be taken into account),

(ii)

such limitation (after application of clause (i)) shall be reduced by the aggregate amount paid to Archer MSAs of such spouses for the taxable year, and

(iii)

such limitation (after application of clauses (i) and (ii)) shall be divided equally between such spouses unless they agree on a different division.

(B)

Treatment of additional contribution amounts

If both spouses referred to in subparagraph (A) have attained age 55 before the close of the taxable year, the limitation referred to in subparagraph (A)(iii) which is subject to division between the spouses shall include the additional contribution amounts determined under paragraph (3) for both spouses. In any other case, any additional contribution amount determined under paragraph (3) shall not be taken into account under subparagraph (A)(iii) and shall not be subject to division between the spouses.

.

(b)

Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2012.

5.

Individuals eligible for veterans benefits for a service-connected disability

(a)

In general

Paragraph (1) of section 223(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

(C)

Special rule for individuals eligible for certain veterans benefits

An individual shall not fail to be treated as an eligible individual for any period merely because the individual receives hospital care or medical services under any law administered by the Secretary of Veterans Affairs for a service-connected disability (within the meaning of section 101(16) of title 38, United States Code).

.

(b)

Effective date

The amendment made by this section shall apply to months beginning after December 31, 2012.

6.

Distributions by certain early retirees for health coverage treated as qualified medical expense

(a)

In general

Subparagraph (C) of section 223(d)(2) of the Internal Revenue Code of 1986 is amended by striking or at the end of clause (iii), by striking the period at the end of clause (iv) and inserting , or, and by adding at the end the following new clause:

(v)

in the case of an account beneficiary who has attained age 55 but not the age specified in section 1811 of the Social Security Act, any group health plan (as defined in section 5000(b)(1)) in which such account beneficiary is enrolled by reason of being a former employee or a surviving spouse of a former employee.

.

(b)

Effective date

The amendments made by this section shall apply to amounts paid for coverage for periods after December 31, 2012.

June 5, 2012

Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed