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Referenced Laws
Section 223
Section 408(d)(9)
Section 106(e)
section 138
section 125(d)
section 101,
42 U.S.C. 1396u–8
Public Law 111–148
Public Law 111–3
section 213
section 220(d)(2)
section 501,
Section 1
1. Short title, etc This Act may be cited as the Health Savings Act of 2023. Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. The table of contents is as follows:
Section 2
101. High deductible health plans renamed HSA-qualified health plans Section 223 is amended by striking high deductible health plan each place it appears and inserting HSA-qualified health plan. The heading for paragraph (2) of section 223(c) is amended by striking High deductible health plan and inserting HSA-qualified health plan. Section 408(d)(9) is amended— by striking high deductible health plan each place it appears in subparagraph (C) and inserting HSA-qualified health plan; and by striking High deductible health plan in the heading of subparagraph (D) and inserting HSA-qualified health plan. Section 106(e) is amended— by striking High deductible health plan in the heading of paragraph (3) and inserting HSA-qualified health plan; and by striking high deductible health plan in paragraph (5)(B)(ii) and inserting HSA-qualified health plan.
Section 3
201. Allow both spouses to make catch-up contributions to the same HSA account Paragraph (5) of section 223(b) is amended to read as follows: In the case of individuals who are married to each other, if both spouses are eligible individuals and either spouse has family coverage under an HSA-qualified health plan as of the first day of any month— the limitation under paragraph (1) shall be applied by not taking into account any other HSA-qualified health plan coverage of either spouse (and if such spouses both have family coverage under separate HSA-qualified health plans, only one such coverage shall be taken into account), 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 such limitation (after application of clauses (i) and (ii)) shall be divided equally between such spouses unless they agree on a different division. 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. The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act. (5)Special rule for married individuals with family coverage(A)In generalIn the case of individuals who are married to each other, if both spouses are eligible individuals and either spouse has family coverage under an HSA-qualified 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 HSA-qualified health plan coverage of either spouse (and if such spouses both have family coverage under separate HSA-qualified 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 amountsIf 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..
Section 4
202. Provisions relating to Medicare Paragraph (7) of section 223(b) is amended by adding at the end the following: This paragraph shall not apply to any individual during any period for which the individual's only entitlement to such benefits is an entitlement to hospital insurance benefits under part A of title XVIII of such Act pursuant to an enrollment for such hospital insurance benefits under section 226(a) of such Act.. Subsection (b) of section 138 is amended by striking paragraph (2) and by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively. The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
Section 5
203. Individuals eligible for Indian Health Service assistance Paragraph (1) of section 223(c) is amended by adding at the end the following new subparagraph: For purposes of subparagraph (A)(ii), an individual shall not be treated as covered under a health plan described in such subparagraph merely because the individual receives hospital care or medical services under a medical care program of the Indian Health Service or of a tribal organization. The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act. (E)Special rule for individuals eligible for assistance under Indian Health Service programsFor purposes of subparagraph (A)(ii), an individual shall not be treated as covered under a health plan described in such subparagraph merely because the individual receives hospital care or medical services under a medical care program of the Indian Health Service or of a tribal organization..
Section 6
204. Members of health care sharing ministries eligible to establish health savings accounts Section 223 is amended by adding at the end the following new subsection: For purposes of this section, membership in a health care sharing ministry (as defined in section 5000A(d)(2)(B)(ii)) shall be treated as coverage under an HSA-qualified health plan. The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act. (i)Application to health care sharing ministriesFor purposes of this section, membership in a health care sharing ministry (as defined in section 5000A(d)(2)(B)(ii)) shall be treated as coverage under an HSA-qualified health plan..
Section 7
205. Treatment of direct primary care service arrangements Section 223(c) is amended by adding at the end the following new paragraph: An arrangement under which an individual is provided coverage restricted to primary care services in exchange for a fixed periodic fee or payment for primary care services— shall not be treated as a health plan for purposes of paragraph (1)(A)(ii), and shall not be treated as insurance for purposes of subsection (d)(2)(B). The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act. (6)Treatment of direct primary care service arrangementsAn arrangement under which an individual is provided coverage restricted to primary care services in exchange for a fixed periodic fee or payment for primary care services—(A)shall not be treated as a health plan for purposes of paragraph (1)(A)(ii), and(B)shall not be treated as insurance for purposes of subsection (d)(2)(B)..
Section 8
206. Individuals eligible for on-site medical clinic coverage Paragraph (1) of section 223(c), as amended by sections 203, is amended by adding at the end the following new subparagraph: For purposes of subparagraph (A)(ii), an individual shall not be treated as covered under a health plan described in such subparagraph merely because the individual is eligible to receive health care benefits from an on-site medical clinic of employer of the individual or the individual's spouse if such health care benefits are not significant benefits. For purposes of clause (i), the following health care benefits shall be considered to be benefits which are not significant benefits: Physicals and immunizations. Injecting antigens provided by employees. Medications available without a prescription, such as pain relievers and antihistamines. Treatment for injuries occurring at the employer's place of employment or otherwise in the course of employment. Tests for infectious diseases and conditions, such as streptococcal sore throat. Monitoring of chronic conditions, such as diabetes. Drug testing. Hearing or vision screenings and related services. Other services and treatments of a similar nature to the services described in subclauses (I) through (VIII). For purposes of clause (i), all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as a single employer. The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act. (F)Special rule for individuals eligible for on-site medical clinic coverage(i)In generalFor purposes of subparagraph (A)(ii), an individual shall not be treated as covered under a health plan described in such subparagraph merely because the individual is eligible to receive health care benefits from an on-site medical clinic of employer of the individual or the individual's spouse if such health care benefits are not significant benefits.(ii)Included benefitsFor purposes of clause (i), the following health care benefits shall be considered to be benefits which are not significant benefits:(I)Physicals and immunizations.(II)Injecting antigens provided by employees.(III)Medications available without a prescription, such as pain relievers and antihistamines.(IV)Treatment for injuries occurring at the employer's place of employment or otherwise in the course of employment.(V)Tests for infectious diseases and conditions, such as streptococcal sore throat.(VI)Monitoring of chronic conditions, such as diabetes.(VII)Drug testing.(VIII)Hearing or vision screenings and related services.(IX)Other services and treatments of a similar nature to the services described in subclauses (I) through (VIII).(iii)Aggregation rulesFor purposes of clause (i), all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as a single employer..
Section 9
207. Treatment of embedded deductibles Paragraph (2) of section 223(c) is amended by adding at the end the following new subparagraph: A health plan providing family coverage that has an annual deductible for all covered individuals under the plan of at least the amount described in subparagraph (A)(i)(II) shall not fail to be treated as an HSA-qualified health plan solely because it covers expenses with respect to an individual under that plan that exceed an embedded deductible which is equal to or in excess of the amount described in subparagraph (A)(i)(I). The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act. (H)Treatment of embedded deductibleA health plan providing family coverage that has an annual deductible for all covered individuals under the plan of at least the amount described in subparagraph (A)(i)(II) shall not fail to be treated as an HSA-qualified health plan solely because it covers expenses with respect to an individual under that plan that exceed an embedded deductible which is equal to or in excess of the amount described in subparagraph (A)(i)(I)..
Section 10
301. Purchase of health insurance from HSA account Paragraph (2) of section 223(d) is amended— by striking and any dependent (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) of such individual in subparagraph (A) and inserting any dependent (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) of such individual, and any child (as defined in section 152(f)(1)) of such individual who has not attained the age of 27 before the end of such individual's taxable year; by striking subparagraph (B) and inserting the following: Except as provided in subparagraph (C), subparagraph (A) shall not apply to any payment for insurance. by striking or at the end of subparagraph (C)(iii) and by striking subparagraph (C)(iv) and inserting the following: an HSA-qualified health plan, or any health insurance under title XVIII of the Social Security Act, other than a Medicare supplemental policy (as defined in section 1882 of such Act). The amendments made by this section shall apply with respect to insurance purchased after the date of the enactment of this Act in taxable years beginning after such date. (B)Health insurance may not be purchased from accountExcept as provided in subparagraph (C), subparagraph (A) shall not apply to any payment for insurance.; and (iv)an HSA-qualified health plan, or(v)any health insurance under title XVIII of the Social Security Act, other than a Medicare supplemental policy (as defined in section 1882 of such Act)..
Section 11
302. Special rule for certain medical expenses incurred before establishment of account Paragraph (2) of section 223(d) is amended by adding at the end the following new subparagraph: If a health savings account is established during the 60-day period beginning on the date that coverage of the account beneficiary under an HSA-qualified 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. The amendment made by this section shall apply with respect to coverage beginning after the date of the enactment of this Act. (E)Treatment of certain medical expenses incurred before establishment of accountIf a health savings account is established during the 60-day period beginning on the date that coverage of the account beneficiary under an HSA-qualified 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..
Section 12
303. Preventive care prescription drug clarification Subparagraph (C) of section 223(c)(2) is amended by adding at the end the following: Preventive care shall include prescription and over-the-counter drugs and medicines which have the primary purpose of preventing the onset of, further deterioration from, or complications associated with chronic conditions, illnesses, or diseases.. The amendment made by this section shall apply to taxable years beginning after December 31, 2023.
Section 13
401. FSA and HRA interaction with HSAs Subparagraph (B) of section 223(c)(1) is amended— by striking and at the end of clause (ii); by striking the period at the end of clause (iii) and inserting , and; and by inserting after clause (iii) the following new clause: coverage under a health flexible spending arrangement or a health reimbursement arrangement in the plan year a qualified HSA distribution as described in section 106(e) is made on behalf of the individual if, after the qualified HSA distribution is made and for the remaining duration of the plan year, the coverage provided under the arrangement is converted solely to one or more of the following: A health flexible spending arrangement or a health reimbursement arrangement that does not pay or reimburse any medical expense incurred before the minimum annual deductible under paragraph (2)(A)(i) (prorated for the period occurring after the qualified HSA distribution is made) is satisfied. A health flexible spending arrangement or a health reimbursement arrangement that, after the qualified HSA distribution is made, does not pay or reimburse any medical expense incurred after the qualified HSA distribution is made other than preventive care as defined in paragraph (2)(C). A health flexible spending arrangement that, after the qualified HSA distribution is made, pays or reimburses benefits for coverage described in clause (ii) (but not through insurance or for long-term care services). A health reimbursement arrangement that, after the qualified HSA distribution is made, pays or reimburses benefits for permitted insurance or coverage described in clause (ii) (but not for long-term care services). A health reimbursement arrangement that, after the qualified HSA distribution is made, pays or reimburses only those medical expenses incurred after an individual’s retirement (and no expenses incurred before retirement). A health reimbursement arrangement that, after the qualified HSA distribution is made, is suspended, pursuant to an election made on or before the date the individual elects a qualified HSA distribution or, if later, on the date of the individual enrolls in an HSA-qualified health plan, that does not pay or reimburse, at any time, any medical expense incurred during the suspension period except as described in the preceding subclauses of this clause. Paragraph (1) of section 106(e) is amended to read as follows: A plan shall not fail to be treated as— a health flexible spending arrangement under this section, section 105, or section 125, a health reimbursement arrangement under this section or section 105, or an accident or health plan, Paragraph (2) of section 125(d) is amended by adding at the end the following new subparagraph: Subparagraph (A) shall not apply to the extent that there is an amount remaining in a health flexible spending account at the end of a plan year that an individual elects to contribute to a health savings account pursuant to a qualified HSA distribution (as defined in section 106(e)(2)). Paragraph (2) of section 106(e) is amended to read as follows: The term qualified HSA distribution means a distribution from a health flexible spending arrangement or health reimbursement arrangement directly to a health savings account of the employee to the extent that such distribution does not exceed the lesser of— the balance in such arrangement as of the date of such distribution, or the amount determined under subparagraph (B). A qualified HSA distribution from a health flexible spending arrangement shall not exceed the applicable amount. A qualified HSA distribution from a health reimbursement arrangement shall not exceed— the applicable amount divided by 12, multiplied by the number of months during which the individual is a participant in the health reimbursement arrangement. For purposes of this subparagraph, the applicable amount is— $2,250 in the case of an eligible individual who has self-only coverage under an HSA-qualified health plan at the time of such distribution, and $4,500 in the case of an eligible individual who has family coverage under an HSA-qualified health plan at the time of such distribution. Subsection (e) of section 106, as amended by section 101, is amended— by striking paragraph (3) and redesignating paragraphs (4) and (5) as paragraphs (3) and (4), respectively, and by striking subparagraph (A) of paragraph (3), as so redesignated, and redesignating subparagraphs (B) and (C) of such paragraph as subparagraphs (A) and (B) thereof, respectively. Subsection (e) of section 106, as amended by this section, is amended by adding at the end the following new paragraph: A plan shall not fail to be a health flexible spending arrangement, a health reimbursement arrangement, or an accident or health plan under this section or section 105 merely because the plan converts coverage for individuals who enroll in an HSA-qualified health plan described in section 223(c)(2) to coverage described in subclause (I), (II), (III), (IV), (V), or (VI) of section 223(c)(1)(B)(iv). Coverage for such individuals may be converted as of the date of enrollment in the HSA-qualified health plan, without regard to the period of coverage under the health flexible spending arrangement or health reimbursement arrangement, and without requiring any change in coverage to individuals who do not enroll in an HSA-qualified health plan. Subsection (e) of section 106, as amended by this section, is amended by adding at the end the following new paragraph: In the case of any taxable year beginning in a calendar year after 2024, each of the dollar amounts in paragraph (2)(B)(iii) shall be increased by an amount equal to such dollar amount, multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which such taxable year begins by substituting calendar year 2023 for calendar year 2016 in subparagraph (A)(ii) thereof. If any increase under paragraph (1) is not a multiple of $50, such increase shall be rounded to the nearest multiple of $50. Subparagraph (B) of section 223(c)(1), as amended by this section, is amended— by striking and at the end of clause (iii); by striking the period at the end of clause (iv) and inserting , and; and by inserting after clause (iv) the following new clause: any coverage (including prospective coverage) under a health plan that is not an HSA-qualified health plan which is disclaimed in writing, at the time of the creation or organization of the health savings account, including by execution of a trust described in subsection (d)(1) through a governing instrument that includes such a disclaimer, or by acceptance of an amendment to such a trust that includes such a disclaimer. The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. (iv)coverage under a health flexible spending arrangement or a health reimbursement arrangement in the plan year a qualified HSA distribution as described in section 106(e) is made on behalf of the individual if, after the qualified HSA distribution is made and for the remaining duration of the plan year, the coverage provided under the arrangement is converted solely to one or more of the following:(I)Post-deductible FSA or HRAA health flexible spending arrangement or a health reimbursement arrangement that does not pay or reimburse any medical expense incurred before the minimum annual deductible under paragraph (2)(A)(i) (prorated for the period occurring after the qualified HSA distribution is made) is satisfied.(II)Preventative careA health flexible spending arrangement or a health reimbursement arrangement that, after the qualified HSA distribution is made, does not pay or reimburse any medical expense incurred after the qualified HSA distribution is made other than preventive care as defined in paragraph (2)(C).(III)Limited purpose health FSAA health flexible spending arrangement that, after the qualified HSA distribution is made, pays or reimburses benefits for coverage described in clause (ii) (but not through insurance or for long-term care services).(IV)Limited purpose HRAA health reimbursement arrangement that, after the qualified HSA distribution is made, pays or reimburses benefits for permitted insurance or coverage described in clause (ii) (but not for long-term care services).(V)Retirement HRAA health reimbursement arrangement that, after the qualified HSA distribution is made, pays or reimburses only those medical expenses incurred after an individual’s retirement (and no expenses incurred before retirement).(VI)Suspended HRAA health reimbursement arrangement that, after the qualified HSA distribution is made, is suspended, pursuant to an election made on or before the date the individual elects a qualified HSA distribution or, if later, on the date of the individual enrolls in an HSA-qualified health plan, that does not pay or reimburse, at any time, any medical expense incurred during the suspension period except as described in the preceding subclauses of this clause.. (1)In generalA plan shall not fail to be treated as—(A)a health flexible spending arrangement under this section, section 105, or section 125,(B)a health reimbursement arrangement under this section or section 105, or(C)an accident or health plan,merely because such plan provides for a qualified HSA distribution.. (E)Exception for qualified HSA distributionsSubparagraph (A) shall not apply to the extent that there is an amount remaining in a health flexible spending account at the end of a plan year that an individual elects to contribute to a health savings account pursuant to a qualified HSA distribution (as defined in section 106(e)(2)).. (2)Qualified HSA distribution(A)In generalThe term qualified HSA distribution means a distribution from a health flexible spending arrangement or health reimbursement arrangement directly to a health savings account of the employee to the extent that such distribution does not exceed the lesser of—(i)the balance in such arrangement as of the date of such distribution, or(ii)the amount determined under subparagraph (B).Such term shall not include more than 1 distribution with respect to any arrangement.(B)Dollar limitations(i)Distributions from a health flexible spending arrangementA qualified HSA distribution from a health flexible spending arrangement shall not exceed the applicable amount.(ii)Distributions from a health reimbursement arrangementA qualified HSA distribution from a health reimbursement arrangement shall not exceed—(I)the applicable amount divided by 12, multiplied by(II)the number of months during which the individual is a participant in the health reimbursement arrangement.(iii)Applicable amountFor purposes of this subparagraph, the applicable amount is—(I)$2,250 in the case of an eligible individual who has self-only coverage under an HSA-qualified health plan at the time of such distribution, and(II)$4,500 in the case of an eligible individual who has family coverage under an HSA-qualified health plan at the time of such distribution.. (5)Limited purpose FSAs and HRAsA plan shall not fail to be a health flexible spending arrangement, a health reimbursement arrangement, or an accident or health plan under this section or section 105 merely because the plan converts coverage for individuals who enroll in an HSA-qualified health plan described in section 223(c)(2) to coverage described in subclause (I), (II), (III), (IV), (V), or (VI) of section 223(c)(1)(B)(iv). Coverage for such individuals may be converted as of the date of enrollment in the HSA-qualified health plan, without regard to the period of coverage under the health flexible spending arrangement or health reimbursement arrangement, and without requiring any change in coverage to individuals who do not enroll in an HSA-qualified health plan.. (6)Cost-of-living adjustment(A)In generalIn the case of any taxable year beginning in a calendar year after 2024, each of the dollar amounts in paragraph (2)(B)(iii) shall be increased by an amount equal to such dollar amount, multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which such taxable year begins by substituting calendar year 2023 for calendar year 2016 in subparagraph (A)(ii) thereof.(B)RoundingIf any increase under paragraph (1) is not a multiple of $50, such increase shall be rounded to the nearest multiple of $50.. (v)any coverage (including prospective coverage) under a health plan that is not an HSA-qualified health plan which is disclaimed in writing, at the time of the creation or organization of the health savings account, including by execution of a trust described in subsection (d)(1) through a governing instrument that includes such a disclaimer, or by acceptance of an amendment to such a trust that includes such a disclaimer..
Section 14
402. Equivalent bankruptcy protections for health savings accounts as retirement funds Section 522 of title 11, United States Code, is amended by adding at the end the following new subsection: 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. 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. (r)Treatment of health savings accountsFor 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..
Section 15
403. Administrative error correction before due date of return Paragraph (4) of section 223(f) is amended by adding at the end the following new subparagraph: Subparagraph (A) shall not apply if any payment or distribution is made to correct an administrative, clerical, or payroll contribution error and if— such distribution is received by the individual on or before the last day prescribed by law (including extensions of time) for filing such individual's return for such taxable year, and such distribution is accompanied by the amount of net income attributable to such contribution. The amendment made by this section shall take effect on the date of the enactment of this Act. (D)Exception for administrative errors corrected before due date of returnSubparagraph (A) shall not apply if any payment or distribution is made to correct an administrative, clerical, or payroll contribution error and if—(i)such distribution is received by the individual on or before the last day prescribed by law (including extensions of time) for filing such individual's return for such taxable year, and(ii)such distribution is accompanied by the amount of net income attributable to such contribution.Any net income described in clause (ii) shall be included in the gross income of the individual for the taxable year in which it is received..
Section 16
404. Reauthorization of Medicaid health opportunity accounts Section 1938 of the Social Security Act (42 U.S.C. 1396u–8) is amended— in subsection (a)— by striking paragraph (2) and inserting the following: The Secretary shall approve States to conduct demonstration programs under this section for a 5-year period, with each State demonstration program covering one or more geographic areas specified by the State. With respect to a State, after the initial 5-year period of any demonstration program conducted under this section by the State, unless the Secretary finds, taking into account cost-effectiveness and quality of care, that the State demonstration program has been unsuccessful, the demonstration program may be extended or made permanent in the State. in paragraph (3), in the matter preceding subparagraph (A)— by striking not; and by striking unless and inserting if ; in subsection (b)— in paragraph (3), by inserting clause (i) through (vii), (viii) (without regard to the amendment made by section 2004(c)(2) of Public Law 111–148), (x), or (xi) of after described in ; and by striking paragraphs (4), (5), and (6); in subsection (c)— by striking paragraphs (3) and (4); by redesignating paragraphs (5) through (8) as paragraphs (3) through (6), respectively; and in paragraph (4) (as redesignated by subparagraph (B)), by striking Subject to subparagraphs (D) and (E) and inserting Subject to subparagraph (D); and in subsection (d)— in paragraph (2), by striking subparagraph (E); and in paragraph (3)— in subparagraph (A)(ii), by striking Subject to subparagraph (B)(ii), in and inserting In; and by striking subparagraph (B) and inserting the following: Notwithstanding any other provision of law, if an account holder of a health opportunity account becomes ineligible for benefits under this title because of an increase in income or assets— no additional contribution shall be made into the account under paragraph (2)(A)(i); and the account shall remain available to the account holder for 3 years after the date on which the individual becomes ineligible for such benefits for withdrawals under the same terms and conditions as if the account holder remained eligible for such benefits, and such withdrawals shall be treated as medical assistance in accordance with subsection (c)(4). Section 613 of Public Law 111–3 is repealed. (2)Initial demonstrationThe Secretary shall approve States to conduct demonstration programs under this section for a 5-year period, with each State demonstration program covering one or more geographic areas specified by the State. With respect to a State, after the initial 5-year period of any demonstration program conducted under this section by the State, unless the Secretary finds, taking into account cost-effectiveness and quality of care, that the State demonstration program has been unsuccessful, the demonstration program may be extended or made permanent in the State.; and (B)Maintenance of health opportunity account after becoming ineligible for public benefitNotwithstanding any other provision of law, if an account holder of a health opportunity account becomes ineligible for benefits under this title because of an increase in income or assets—(i)no additional contribution shall be made into the account under paragraph (2)(A)(i); and(ii)the account shall remain available to the account holder for 3 years after the date on which the individual becomes ineligible for such benefits for withdrawals under the same terms and conditions as if the account holder remained eligible for such benefits, and such withdrawals shall be treated as medical assistance in accordance with subsection (c)(4)..
Section 17
405. Maximum contribution limit to health savings account increased to amount of deductible and out-of-pocket limitation Section 223(b)(2)(A) is amended by striking $2,250 and inserting the amount in effect under subsection (c)(2)(A)(ii)(I). Section 223(b)(2)(B) is amended by striking $4,500 and inserting the amount in effect under subsection (c)(2)(A)(ii)(II). Section 223(g)(1) is amended— by striking subsections (b)(2) and both places it appears and inserting subsection; and by striking determined by in subparagraph (B) thereof and all that follows through calendar year 2003. and inserting determined by substituting calendar year 2003 for calendar year 2016 in subparagraph (A)(ii) thereof.. The amendments made by this section shall apply to taxable years beginning after December 31, 2023.
Section 18
501. Certain exercise equipment and physical fitness programs treated as medical care Subsection (d) of section 213 is amended by adding at the end the following new paragraph: The term medical care shall include amounts paid— for equipment for use in a program (including a self-directed program) of physical exercise or physical activity, to participate, or receive instruction, in a program of physical exercise, nutrition, or health coaching (including a self-directed program), and for membership at a fitness facility. Amounts treated as medical care under subparagraph (A) shall not exceed $1,000 with respect to any individual for any taxable year. Clause (i) shall not apply for purposes of determining whether expenses reimbursed through a health flexible spending arrangement subject to section 125(i)(1) are incurred for medical care. Amounts paid for equipment described in subparagraph (A)(i) shall be treated as medical care only— if such equipment is utilized exclusively for participation in fitness, exercise, sport, or other physical activity programs, if such equipment is not apparel or footwear, and in the case of any item of sports equipment (other than exercise equipment), with respect to so much of the amount paid for such item as does not exceed $250. For purposes of subparagraph (A)(iii), the term fitness facility means a facility— providing instruction in a program of physical exercise, offering facilities for the preservation, maintenance, encouragement, or development of physical fitness, or serving as the site of such a program of a State or local government, which is not a private club owned and operated by its members, which does not offer golf, hunting, sailing, or riding facilities, whose health or fitness facility is not incidental to its overall function and purpose, and which is fully compliant with the State of jurisdiction and Federal anti-discrimination laws. Subparagraph (A) of section 223(d)(2) is amended by inserting , determined without regard to paragraph (12)(B) thereof after medical care (as defined in section 213(d). Subparagraph (A) of section 220(d)(2) is amended by inserting , determined without regard to paragraph (12)(B) thereof after medical care (as defined in section 213(d). The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. (12)Exercise equipment and physical fitness activity(A)In generalThe term medical care shall include amounts paid—(i)for equipment for use in a program (including a self-directed program) of physical exercise or physical activity,(ii)to participate, or receive instruction, in a program of physical exercise, nutrition, or health coaching (including a self-directed program), and(iii)for membership at a fitness facility.(B)Overall dollar limitation(i)In generalAmounts treated as medical care under subparagraph (A) shall not exceed $1,000 with respect to any individual for any taxable year.(ii)ExceptionClause (i) shall not apply for purposes of determining whether expenses reimbursed through a health flexible spending arrangement subject to section 125(i)(1) are incurred for medical care.(C)Limitations related to sports and fitness equipmentAmounts paid for equipment described in subparagraph (A)(i) shall be treated as medical care only—(i)if such equipment is utilized exclusively for participation in fitness, exercise, sport, or other physical activity programs,(ii)if such equipment is not apparel or footwear, and(iii)in the case of any item of sports equipment (other than exercise equipment), with respect to so much of the amount paid for such item as does not exceed $250.(D)Fitness facility definedFor purposes of subparagraph (A)(iii), the term fitness facility means a facility—(i)providing instruction in a program of physical exercise, offering facilities for the preservation, maintenance, encouragement, or development of physical fitness, or serving as the site of such a program of a State or local government,(ii)which is not a private club owned and operated by its members,(iii)which does not offer golf, hunting, sailing, or riding facilities,(iv)whose health or fitness facility is not incidental to its overall function and purpose, and(v)which is fully compliant with the State of jurisdiction and Federal anti-discrimination laws..
Section 19
502. Certain nutritional and dietary supplements to be treated as medical care Subsection (d) of section 213, as amended by section 501, is amended by adding at the end the following new paragraph: The term medical care shall include amounts paid to purchase herbs, vitamins, minerals, homeopathic remedies, meal replacement products, and other dietary and nutritional supplements. Amounts treated as medical care under subparagraph (A) shall not exceed $1,000 with respect to any individual for any taxable year. For purposes of this paragraph, the term meal replacement product means any product that— is permitted to bear labeling making a claim described in section 403(r)(3) of the Federal Food, Drug, and Cosmetic Act, and is permitted to claim under such section that such product is low in fat and is a good source of protein, fiber, and multiple essential vitamins and minerals. Subparagraph (B) shall not apply for purposes of determining whether expenses reimbursed through a health flexible spending arrangement subject to section 125(i)(1) are incurred for medical care. Subparagraph (A) of section 223(d)(2), as amended by section 501, is amended by striking paragraph (12)(B) and inserting paragraphs (12)(B) and (13)(B). Subparagraph (A) of section 220(d)(2), as amended by section 501, is amended by striking paragraph (12)(B) and inserting paragraphs (12)(B) and (13)(B). The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. (13)Nutritional and dietary supplements(A)In generalThe term medical care shall include amounts paid to purchase herbs, vitamins, minerals, homeopathic remedies, meal replacement products, and other dietary and nutritional supplements.(B)LimitationAmounts treated as medical care under subparagraph (A) shall not exceed $1,000 with respect to any individual for any taxable year.(C)Meal replacement productFor purposes of this paragraph, the term meal replacement product means any product that—(i)is permitted to bear labeling making a claim described in section 403(r)(3) of the Federal Food, Drug, and Cosmetic Act, and(ii)is permitted to claim under such section that such product is low in fat and is a good source of protein, fiber, and multiple essential vitamins and minerals.(D)ExceptionSubparagraph (B) shall not apply for purposes of determining whether expenses reimbursed through a health flexible spending arrangement subject to section 125(i)(1) are incurred for medical care..
Section 20
503. Certain provider fees to be treated as medical care Subsection (d) of section 213, as amended by sections 501 and 502, is amended by adding at the end the following new paragraph: The term medical care shall include— periodic fees paid to a primary care physician for a defined set of medical services or the right to receive medical services on an as-needed basis, and pre-paid primary care services designed to screen for, diagnose, cure, mitigate, treat, or prevent disease and promote wellness. Section 125 is amended by redesignating subsections (k) and (l) as subsections (l) and (m), respectively, and by inserting after subsection (j) the following new subsection: For purposes of applying this with respect to any health flexible spending arrangement, amounts described in section 213(d)(14) shall not be considered insurance. The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. (14)Periodic provider feesThe term medical care shall include—(A)periodic fees paid to a primary care physician for a defined set of medical services or the right to receive medical services on an as-needed basis, and(B)pre-paid primary care services designed to screen for, diagnose, cure, mitigate, treat, or prevent disease and promote wellness.. (k)Special rule with respect to health flexible spending arrangementsFor purposes of applying this with respect to any health flexible spending arrangement, amounts described in section 213(d)(14) shall not be considered insurance..