I
119THCONGRESS
1
STSESSION H. R. 548
To amend the Internal Revenue Code of 1986 to modernize health savings
accounts.
IN THE HOUSE OF REPRESENTATIVES
JANUARY16, 2025
Ms. V
ANDUYNE(for herself, Mr. CRENSHAW, and Mr. MEUSER) 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 modernize
health savings accounts.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘HSA Modernization 4
Act’’. 5
VerDate Sep 11 2014 02:03 Feb 13, 2025 Jkt 059200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H548.IH H548
kjohnson on DSK7ZCZBW3PROD with $$_JOB 2
•HR 548 IH
SEC. 2. INDIVIDUALS WITHOUT SERVICE-CONNECTED DIS-1
ABILITY AND ELIGIBLE FOR CERTAIN VET-2
ERANS BENEFITS PERMITTED TO CON-3
TRIBUTE TO HEALTH SAVINGS ACCOUNTS. 4
(a) I
NGENERAL.—Section 223(c)(1)(C) of the Inter-5
nal Revenue Code of 1986 is amended by striking ‘‘for 6
a service-connected disability (within the meaning of sec-7
tion 101(16) of title 38, United States Code)’’. 8
(b) E
FFECTIVEDATE.—The amendment made by 9
this section shall apply to taxable years beginning after 10
December 31, 2025. 11
SEC. 3. INDIVIDUALS ENTITLED TO PART A OF MEDICARE 12
BY REASON OF AGE ALLOWED TO CON-13
TRIBUTE TO HEALTH SAVINGS ACCOUNTS. 14
(a) I
NGENERAL.—Section 223(c)(1)(B) of the Inter-15
nal Revenue Code of 1986 is amended by striking ‘‘and’’ 16
at the end of clause (ii), by striking the period at the end 17
of clause (iii) and inserting ‘‘, and’’, and by adding at the 18
end the following new clause: 19
‘‘(iv) entitlement to hospital insurance 20
benefits under part A of title XVIII of the 21
Social Security Act by reason of section 22
226(a) of such Act.’’. 23
(b) T
REATMENT OF HEALTHINSURANCE PUR-24
CHASEDFROMACCOUNT.—Section 223(d)(2)(C)(iv) of 25
such Code is amended by inserting ‘‘and who is not an 26
VerDate Sep 11 2014 02:03 Feb 13, 2025 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H548.IH H548
kjohnson on DSK7ZCZBW3PROD with $$_JOB 3
•HR 548 IH
eligible individual’’ after ‘‘who has attained the age speci-1
fied in section 1811 of the Social Security Act’’. 2
(c) C
OORDINATIONWITHPENALTY ONDISTRIBU-3
TIONSNOTUSED FOR QUALIFIEDMEDICALEX-4
PENSES.—Section 223(f)(4)(C) of such Code is amended 5
by striking ‘‘Subparagraph (A)’’ and inserting ‘‘Except in 6
the case of an eligible individual, subparagraph (A)’’ 7
(d) C
ONFORMINGAMENDMENT.—Section 223(b)(7) 8
of such Code is amended by inserting ‘‘(other than an enti-9
tlement to benefits described in subsection (c)(1)(B)(iv))’’ 10
after ‘‘Social Security Act’’. 11
(e) E
FFECTIVEDATE.—The amendments made by 12
this section shall apply to months beginning after Decem-13
ber 31, 2025, in taxable years ending after such date. 14
SEC. 4. INDIVIDUALS ELIGIBLE FOR INDIAN HEALTH SERV-15
ICE ASSISTANCE NOT DISQUALIFIED FROM 16
HEALTH SAVINGS ACCOUNTS. 17
(a) I
NGENERAL.—Section 223(c)(1) of the Internal 18
Revenue Code of 1986 is amended by adding at the end 19
the following new subparagraph: 20
‘‘(E) S
PECIAL RULE FOR INDIVIDUALS EL -21
IGIBLE FOR ASSISTANCE UNDER INDIAN 22
HEALTH SERVICE PROGRAMS .—For purposes of 23
subparagraph (A)(ii), an individual shall not be 24
treated as covered under a health plan de-25
VerDate Sep 11 2014 02:03 Feb 13, 2025 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H548.IH H548
kjohnson on DSK7ZCZBW3PROD with $$_JOB 4
•HR 548 IH
scribed in such subparagraph merely because 1
the individual receives hospital care or medical 2
services under a medical care program of the 3
Indian Health Service or of a tribal organiza-4
tion.’’. 5
(b) E
FFECTIVEDATE.—The amendment made by 6
this section shall apply to taxable years beginning after 7
December 31, 2025. 8
SEC. 5. ALLOWANCE OF BRONZE AND CATASTROPHIC 9
PLANS IN CONNECTION WITH HEALTH SAV-10
INGS ACCOUNTS. 11
(a) I
NGENERAL.—Section 223(c)(2) of the Internal 12
Revenue Code of 1986 is amended by adding at the end 13
the following new subparagraph: 14
‘‘(H) B
RONZE AND CATASTROPHIC PLANS 15
TREATED AS HIGH DEDUCTIBLE HEALTH 16
PLANS.—The term ‘high deductible health plan’ 17
shall include any plan described in subsection 18
(d)(1)(A) or (e) of section 1302 of the Patient 19
Protection and Affordable Care Act.’’. 20
(b) E
FFECTIVEDATE.—The amendment made by 21
this section shall apply to months beginning after Decem-22
ber 31, 2025, in taxable years ending after such date. 23
VerDate Sep 11 2014 02:03 Feb 13, 2025 Jkt 059200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H548.IH H548
kjohnson on DSK7ZCZBW3PROD with $$_JOB 5
•HR 548 IH
SEC. 6. SAFE HARBOR FOR ABSENCE OF DEDUCTIBLE FOR 1
MENTAL HEALTH SERVICES. 2
(a) I
NGENERAL.—Section 223(c)(2) of the Internal 3
Revenue Code of 1986, as amended by this Act, is amend-4
ed by adding at the end the following new subparagraph: 5
‘‘(I) S
AFE HARBOR FOR ABSENCE OF DE -6
DUCTIBLE FOR MENTAL HEALTH SERVICES .—A 7
plan shall not fail to be treated as a high de-8
ductible health plan by reason of failing to have 9
a deductible for not more than the first $500 10
of any mental health benefits (as defined in sec-11
tion 9812(e)(4)) specified by the plan for pur-12
poses of this subparagraph.’’. 13
(b) E
FFECTIVEDATE.—The amendments made by 14
this section shall apply to plan years beginning after De-15
cember 31, 2025. 16
SEC. 7. SPECIAL RULE FOR CERTAIN MEDICAL EXPENSES 17
INCURRED BEFORE ESTABLISHMENT OF 18
HEALTH SAVINGS ACCOUNT. 19
(a) I
NGENERAL.—Section 223(d)(2) of the Internal 20
Revenue Code of 1986 is amended by adding at the end 21
the following new subparagraph: 22
‘‘(E) T
REATMENT OF CERTAIN MEDICAL 23
EXPENSES INCURRED BEFORE ESTABLISHMENT 24
OF ACCOUNT.—If a health savings account is 25
established during the 60-day period beginning 26
VerDate Sep 11 2014 02:03 Feb 13, 2025 Jkt 059200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H548.IH H548
kjohnson on DSK7ZCZBW3PROD with $$_JOB 6
•HR 548 IH
on the date that coverage of the account bene-1
ficiary under a high deductible health plan be-2
gins, then, solely for purposes of determining 3
whether an amount paid is used for a qualified 4
medical expense, such account shall be treated 5
as having been established on the date that 6
such coverage begins.’’. 7
(b) E
FFECTIVEDATE.—The amendment made by 8
this section shall apply with respect to coverage beginning 9
after December 31, 2025. 10
SEC. 8. ALLOW BOTH SPOUSES TO MAKE CATCH-UP CON-11
TRIBUTIONS TO THE SAME HEALTH SAVINGS 12
ACCOUNT. 13
(a) I
NGENERAL.—Section 223(b)(5) of the Internal 14
Revenue Code of 1986 is amended to read as follows: 15
‘‘(5) S
PECIAL RULE FOR MARRIED INDIVIDUALS 16
WITH FAMILY COVERAGE .— 17
‘‘(A) I
N GENERAL.—In the case of individ-18
uals who are married to each other, if both 19
spouses are eligible individuals and either 20
spouse has family coverage under a high de-21
ductible health plan as of the first day of any 22
month— 23
‘‘(i) the limitation under paragraph 24
(1) shall be applied by not taking into ac-25
VerDate Sep 11 2014 02:03 Feb 13, 2025 Jkt 059200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H548.IH H548
kjohnson on DSK7ZCZBW3PROD with $$_JOB 7
•HR 548 IH
count any other high deductible health 1
plan coverage of either spouse (and if such 2
spouses both have family coverage under 3
separate high deductible health plans, only 4
one such coverage shall be taken into ac-5
count), 6
‘‘(ii) such limitation (after application 7
of clause (i)) shall be reduced by the ag-8
gregate amount paid to Archer MSAs of 9
such spouses for the taxable year, and 10
‘‘(iii) such limitation (after application 11
of clauses (i) and (ii)) shall be divided 12
equally between such spouses unless they 13
agree on a different division. 14
‘‘(B) T
REATMENT OF ADDITIONAL CON -15
TRIBUTION AMOUNTS .—If both spouses referred 16
to in subparagraph (A) have attained age 55 17
before the close of the taxable year, the limita-18
tion referred to in subparagraph (A)(iii) which 19
is subject to division between the spouses shall 20
include the additional contribution amounts de-21
termined under paragraph (3) for both spouses. 22
In any other case, any additional contribution 23
amount determined under paragraph (3) shall 24
not be taken into account under subparagraph 25
VerDate Sep 11 2014 02:03 Feb 13, 2025 Jkt 059200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H548.IH H548
kjohnson on DSK7ZCZBW3PROD with $$_JOB 8
•HR 548 IH
(A)(iii) and shall not be subject to division be-1
tween the spouses.’’. 2
(b) E
FFECTIVEDATE.—The amendments made by 3
this section shall apply to taxable years beginning after 4
December 31, 2025. 5
SEC. 9. MAXIMUM CONTRIBUTION LIMIT TO HEALTH SAV-6
INGS ACCOUNT INCREASED TO AMOUNT OF 7
DEDUCTIBLE AND OUT-OF-POCKET LIMITA-8
TION. 9
(a) S
ELF-ONLYCOVERAGE.—Section 223(b)(2)(A) 10
of the Internal Revenue Code of 1986 is amended by strik-11
ing ‘‘$2,250’’ and inserting ‘‘the amount in effect under 12
subsection (c)(2)(A)(ii)(I)’’. 13
(b) F
AMILYCOVERAGE.—Section 223(b)(2)(B) of 14
such Code is amended by striking ‘‘$4,500’’ and inserting 15
‘‘the amount in effect under subsection (c)(2)(A)(ii)(II)’’. 16
(c) C
ONFORMINGAMENDMENTS.—Section 223(g)(1) 17
of such Code is amended— 18
(1) by striking ‘‘subsections (b)(2) and’’ both 19
places it appears and inserting ‘‘subsection’’, and 20
(2) in subparagraph (B), by striking ‘‘deter-21
mined by’’ and all that follows through ‘‘‘calendar 22
year 2003’.’’ and inserting ‘‘determined by sub-23
stituting ‘calendar year 2003’ for ‘calendar year 24
2016’ in subparagraph (A)(ii) thereof.’’. 25
VerDate Sep 11 2014 02:03 Feb 13, 2025 Jkt 059200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H548.IH H548
kjohnson on DSK7ZCZBW3PROD with $$_JOB 9
•HR 548 IH
(d) EFFECTIVEDATE.—The amendments made by 1
this section shall apply to taxable years beginning after 2
December 31, 2025. 3
SEC. 10. CLARIFICATION OF TREATMENT OF DISTRIBU-4
TIONS FROM HEALTH SAVINGS ACCOUNT 5
FOR LONG-TERM CARE SERVICES. 6
(a) I
NGENERAL.—Section 223(d)(2)(A) of the Inter-7
nal Revenue Code of 1986 is amended by inserting before 8
the last sentence the following: ‘‘Such term includes 9
amounts paid for qualified long-term care services (as de-10
fined in section 7702B(c)).’’. 11
(b) E
FFECTIVEDATE.—The amendment made by 12
this section shall apply to amounts paid after the date of 13
the enactment of this Act. 14
(c) N
OINFERENCE.—Nothing contained in this sec-15
tion or the amendment made thereby shall be construed 16
to create any inference with respect to any amounts paid 17
on or before such date. 18
Æ
VerDate Sep 11 2014 02:03 Feb 13, 2025 Jkt 059200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6301 E:\BILLS\H548.IH H548
kjohnson on DSK7ZCZBW3PROD with $$_JOB