| 1 | 1 | | I |
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| 2 | 2 | | 119THCONGRESS |
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| 3 | 3 | | 1 |
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| 4 | 4 | | STSESSION H. R. 955 |
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| 5 | 5 | | To amend the Internal Revenue Code of 1986 to reform health provisions, |
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| 6 | 6 | | and for other purposes. |
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| 7 | 7 | | IN THE HOUSE OF REPRESENTATIVES |
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| 8 | 8 | | FEBRUARY4, 2025 |
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| 9 | 9 | | Mr. M |
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| 10 | 10 | | OOREof Utah (for himself, Mr. PANETTA, Mr. FITZPATRICK, Mr. |
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| 11 | 11 | | S |
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| 12 | 12 | | CHNEIDER, Mr. SMITHof Nebraska, Mr. RUIZ, Mr. VALADAO, Mrs. |
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| 13 | 13 | | D |
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| 14 | 14 | | INGELL, Mr. MOOLENAAR, and Mr. DAVISof North Carolina) intro- |
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| 15 | 15 | | duced the following bill; which was referred to the Committee on Ways |
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| 16 | 16 | | and Means |
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| 17 | 17 | | A BILL |
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| 18 | 18 | | To amend the Internal Revenue Code of 1986 to reform |
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| 19 | 19 | | health provisions, and for other purposes. |
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| 20 | 20 | | Be it enacted by the Senate and House of Representa-1 |
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| 21 | 21 | | tives of the United States of America in Congress assembled, 2 |
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| 22 | 22 | | SECTION 1. SHORT TITLE. 3 |
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| 23 | 23 | | This Act may be cited as the ‘‘Health Out-of-Pocket 4 |
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| 24 | 24 | | Expense Act of 2025’’ or the ‘‘HOPE Act of 2025’’. 5 |
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| 25 | 25 | | SEC. 2. HOPE ACCOUNTS. 6 |
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| 26 | 26 | | (a) A |
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| 27 | 27 | | CCOUNTSESTABLISHED.— 7 |
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| 28 | 28 | | (1) I |
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| 29 | 29 | | N GENERAL.—Part VIII of subchapter F 8 |
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| 30 | 30 | | of chapter 1 of the Internal Revenue Code of 1986 9 |
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| 31 | 31 | | VerDate Sep 11 2014 04:12 Mar 01, 2025 Jkt 059200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H955.IH H955 |
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| 32 | 32 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 2 |
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| 33 | 33 | | •HR 955 IH |
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| 34 | 34 | | is amended by adding at the end the following new 1 |
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| 35 | 35 | | section: 2 |
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| 36 | 36 | | ‘‘SEC. 530A. HOPE ACCOUNTS. 3 |
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| 37 | 37 | | ‘‘(a) I |
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| 38 | 38 | | NGENERAL.—A HOPE Account shall be ex-4 |
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| 39 | 39 | | empt from taxation under this subtitle. Notwithstanding 5 |
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| 40 | 40 | | the preceding sentence, the Hope Account shall be subject 6 |
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| 41 | 41 | | to the taxes imposed by section 511 (relating to the impo-7 |
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| 42 | 42 | | sition of tax on unrelated business income of charitable 8 |
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| 43 | 43 | | organizations). 9 |
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| 44 | 44 | | ‘‘(b) D |
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| 45 | 45 | | EFINITIONS ANDSPECIALRULES.—For pur-10 |
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| 46 | 46 | | poses of this section— 11 |
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| 47 | 47 | | ‘‘(1) HOPE |
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| 48 | 48 | | ACCOUNT.—The term ‘HOPE Ac-12 |
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| 49 | 49 | | count’ means a trust created or organized in the 13 |
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| 50 | 50 | | United States as a HOPE Account exclusively for 14 |
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| 51 | 51 | | the purpose of paying the qualified medical expenses 15 |
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| 52 | 52 | | of the account beneficiary, but only if the written 16 |
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| 53 | 53 | | governing instrument creating the trust meets the 17 |
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| 54 | 54 | | following requirements: 18 |
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| 55 | 55 | | ‘‘(A) Except in the case of a rollover con-19 |
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| 56 | 56 | | tribution described in subsection (d)(4) of this 20 |
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| 57 | 57 | | section, no contribution will be accepted— 21 |
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| 58 | 58 | | ‘‘(i) unless it is in cash, or 22 |
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| 59 | 59 | | ‘‘(ii) to the extent such contribution, 23 |
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| 60 | 60 | | when added to previous contributions to 24 |
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| 62 | 62 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 3 |
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| 63 | 63 | | •HR 955 IH |
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| 64 | 64 | | the trust for the calendar year, exceeds the 1 |
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| 65 | 65 | | contribution limitations in subsection (c). 2 |
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| 66 | 66 | | ‘‘(B) The trustee is a bank (as defined in 3 |
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| 67 | 67 | | section 408(n)), an insurance company (as de-4 |
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| 68 | 68 | | fined in section 816), or another person who 5 |
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| 69 | 69 | | demonstrates to the satisfaction of the Sec-6 |
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| 70 | 70 | | retary that the manner in which such person 7 |
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| 71 | 71 | | will administer the trust will be consistent with 8 |
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| 72 | 72 | | the requirements of this section. 9 |
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| 73 | 73 | | ‘‘(C) No part of the trust assets will be in-10 |
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| 74 | 74 | | vested in life insurance contracts. 11 |
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| 75 | 75 | | ‘‘(D) The assets of the trust will not be 12 |
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| 76 | 76 | | commingled with other property except in a 13 |
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| 77 | 77 | | common trust fund or common investment 14 |
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| 78 | 78 | | fund. 15 |
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| 79 | 79 | | ‘‘(E) The interest of an individual in the 16 |
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| 80 | 80 | | balance in the individual’s account is nonforfeit-17 |
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| 81 | 81 | | able. 18 |
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| 82 | 82 | | ‘‘(F) No more than reasonable fees are 19 |
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| 83 | 83 | | paid in connection with the administration of 20 |
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| 84 | 84 | | the account. 21 |
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| 85 | 85 | | ‘‘(G) The trust includes procedures for the 22 |
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| 86 | 86 | | trustee to reasonably assure that distributions 23 |
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| 87 | 87 | | are limited to payment or reimbursement for 24 |
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| 88 | 88 | | qualified medical expenses incurred after the es-25 |
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| 90 | 90 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 4 |
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| 91 | 91 | | •HR 955 IH |
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| 92 | 92 | | tablishment of the trust. Procedures shall be 1 |
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| 93 | 93 | | considered reasonable that meet the substan-2 |
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| 94 | 94 | | tiation requirements contained in Proposed 3 |
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| 95 | 95 | | Treasury Regulation section 1.125–6 (as in ef-4 |
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| 96 | 96 | | fect on January 1, 2025) or under any super-5 |
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| 97 | 97 | | seding guidance prescribed by the Secretary. 6 |
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| 98 | 98 | | ‘‘(H) The trust follows all reporting re-7 |
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| 99 | 99 | | quirements as may be prescribed by the Sec-8 |
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| 100 | 100 | | retary with respect to distributions that are not 9 |
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| 101 | 101 | | substantiated as qualified medical expenses pur-10 |
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| 102 | 102 | | suant to this section. 11 |
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| 103 | 103 | | ‘‘(I) The trust follows any other guidance 12 |
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| 104 | 104 | | with respect to HOPE Accounts prescribed by 13 |
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| 105 | 105 | | the Secretary. 14 |
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| 106 | 106 | | ‘‘(J) Except as provided in subsection 15 |
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| 107 | 107 | | (d)(2)(B), amounts held by the trust may not 16 |
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| 108 | 108 | | be distributable other than exclusively to pay 17 |
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| 109 | 109 | | the qualified medical expenses of the account 18 |
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| 110 | 110 | | beneficiary, spouse or dependents. 19 |
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| 111 | 111 | | ‘‘(K) The trust reports all contributions on 20 |
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| 112 | 112 | | Form 5498–A, or such other form as is re-21 |
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| 113 | 113 | | quired by the Secretary. The trust annually 22 |
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| 114 | 114 | | must also— 23 |
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| 115 | 115 | | ‘‘(i) request each account owner to 24 |
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| 116 | 116 | | provide the trust with the amount if any, 25 |
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| 118 | 118 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 5 |
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| 119 | 119 | | •HR 955 IH |
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| 120 | 120 | | the account owner contributed to an FSA 1 |
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| 121 | 121 | | for the year, and 2 |
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| 122 | 122 | | ‘‘(ii) report such amount on Form 3 |
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| 123 | 123 | | 5498–A or such other form as is required 4 |
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| 124 | 124 | | by the Secretary. 5 |
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| 125 | 125 | | ‘‘(2) E |
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| 126 | 126 | | LIGIBLE INDIVIDUAL.— 6 |
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| 127 | 127 | | ‘‘(A) I |
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| 128 | 128 | | N GENERAL.—The term ‘eligible in-7 |
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| 129 | 129 | | dividual’ means, with respect to any month, any 8 |
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| 130 | 130 | | individual if for such month such individual 9 |
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| 131 | 131 | | meets the requirements of subparagraphs (B) 10 |
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| 132 | 132 | | and (C). 11 |
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| 133 | 133 | | ‘‘(B) C |
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| 134 | 134 | | OVERAGE REQUIREMENT .—An indi-12 |
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| 135 | 135 | | vidual meets the requirements of this subpara-13 |
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| 136 | 136 | | graph for a month if such individual is covered 14 |
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| 137 | 137 | | under one of the following types of coverage as 15 |
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| 138 | 138 | | of the 1st day of such month: 16 |
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| 139 | 139 | | ‘‘(i) Minimum essential coverage (as 17 |
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| 140 | 140 | | defined in section 5000A(f)). 18 |
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| 141 | 141 | | ‘‘(ii) With respect to members of fed-19 |
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| 142 | 142 | | erally recognized American Indian and 20 |
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| 143 | 143 | | Alaska Native Tribes and their descend-21 |
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| 144 | 144 | | ants, the Indian Health Service. 22 |
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| 145 | 145 | | ‘‘(C) O |
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| 146 | 146 | | THER COVERAGE.— 23 |
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| 147 | 147 | | ‘‘(i) I |
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| 148 | 148 | | N GENERAL.—An individual 24 |
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| 149 | 149 | | meets the requirements of this subpara-25 |
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| 151 | 151 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 6 |
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| 152 | 152 | | •HR 955 IH |
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| 153 | 153 | | graph for a month if during such month 1 |
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| 154 | 154 | | no amounts are contributed by or on be-2 |
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| 155 | 155 | | half of the individual to any of the fol-3 |
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| 156 | 156 | | lowing accounts of such individual: 4 |
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| 157 | 157 | | ‘‘(I) A health flexible spending 5 |
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| 158 | 158 | | arrangement. 6 |
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| 159 | 159 | | ‘‘(II) A health savings account 7 |
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| 160 | 160 | | (as defined in section 223(d)). 8 |
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| 161 | 161 | | ‘‘(III) A health reimbursement 9 |
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| 162 | 162 | | arrangement which is treated as em-10 |
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| 163 | 163 | | ployer-provided coverage under an ac-11 |
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| 164 | 164 | | cident or health plan for purposes of 12 |
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| 165 | 165 | | section 106. 13 |
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| 166 | 166 | | ‘‘(IV) An Archer MSA (as de-14 |
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| 167 | 167 | | fined in section 220(d)). 15 |
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| 168 | 168 | | ‘‘(ii) E |
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| 169 | 169 | | XCEPTION FOR CERTAIN DIS -16 |
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| 170 | 170 | | REGARDED COVERAGE .—Clause (i) shall 17 |
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| 171 | 171 | | not apply in the case of an account de-18 |
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| 172 | 172 | | scribed therein if for the month such ac-19 |
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| 173 | 173 | | count constitutes coverage described in sec-20 |
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| 174 | 174 | | tion 223(c)(1)(B). 21 |
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| 175 | 175 | | ‘‘(3) Q |
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| 176 | 176 | | UALIFIED MEDICAL EXPENSES .—The 22 |
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| 177 | 177 | | term ‘qualified medical expenses’ has the meaning 23 |
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| 178 | 178 | | given such term in section 223(d)(2). 24 |
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| 180 | 180 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 7 |
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| 181 | 181 | | •HR 955 IH |
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| 182 | 182 | | ‘‘(4) ACCOUNT BENEFICIARY .—The term ‘ac-1 |
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| 183 | 183 | | count beneficiary’ means the individual on whose be-2 |
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| 184 | 184 | | half the HOPE Account was established. 3 |
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| 185 | 185 | | ‘‘(5) A |
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| 186 | 186 | | CCOUNT TERMINATIONS .—Rules similar 4 |
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| 187 | 187 | | to the rules of paragraphs (2) and (4) of section 5 |
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| 188 | 188 | | 408(e) shall apply to HOPE Accounts, and any 6 |
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| 189 | 189 | | amount treated as distributed under such rules shall 7 |
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| 190 | 190 | | be treated as not used to pay qualified medical ex-8 |
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| 191 | 191 | | penses. 9 |
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| 192 | 192 | | ‘‘(6) C |
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| 193 | 193 | | ERTAIN RULES TO APPLY .—Rules similar 10 |
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| 194 | 194 | | to the following rules shall apply for purposes of this 11 |
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| 195 | 195 | | section: 12 |
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| 196 | 196 | | ‘‘(A) Section 219(f)(3) (relating to time 13 |
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| 197 | 197 | | when contributions deemed made). 14 |
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| 198 | 198 | | ‘‘(B) Except as provided in section 106(h), 15 |
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| 199 | 199 | | section 219(f)(5) (relating to employer pay-16 |
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| 200 | 200 | | ments). 17 |
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| 201 | 201 | | ‘‘(C) Section 408(g) (relating to commu-18 |
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| 202 | 202 | | nity property laws). 19 |
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| 203 | 203 | | ‘‘(D) Section 408(h) (relating to custodial 20 |
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| 204 | 204 | | accounts). 21 |
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| 205 | 205 | | ‘‘(E) Section 223(f)(7) (relating to trans-22 |
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| 206 | 206 | | fer of account incident of divorce). 23 |
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| 207 | 207 | | ‘‘(F) Section 223(f)(8) (relating to treat-24 |
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| 208 | 208 | | ment after death of account beneficiary). 25 |
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| 210 | 210 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 8 |
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| 211 | 211 | | •HR 955 IH |
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| 212 | 212 | | ‘‘(c) CONTRIBUTIONLIMITATIONS.— 1 |
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| 213 | 213 | | ‘‘(1) I |
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| 214 | 214 | | N GENERAL.—The aggregate amount of 2 |
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| 215 | 215 | | contributions from all sources to all HOPE Accounts 3 |
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| 216 | 216 | | maintained for the benefit of an eligible individual 4 |
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| 217 | 217 | | for any taxable year shall not exceed the sum of the 5 |
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| 218 | 218 | | monthly limitations for months during such taxable 6 |
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| 219 | 219 | | year that the individual is an eligible individual. 7 |
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| 220 | 220 | | ‘‘(2) M |
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| 221 | 221 | | ONTHLY LIMITATION.—The monthly lim-8 |
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| 222 | 222 | | itation for any month is |
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| 223 | 223 | | 1 |
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| 224 | 224 | | ⁄12of— 9 |
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| 225 | 225 | | ‘‘(A) in the case of an eligible individual 10 |
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| 226 | 226 | | who has self-only coverage, or an eligible indi-11 |
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| 227 | 227 | | vidual that is married filing separately or mar-12 |
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| 228 | 228 | | ried filing jointly that has family coverage, 13 |
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| 229 | 229 | | $4,000, or 14 |
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| 230 | 230 | | ‘‘(B) in the case of an eligible individual 15 |
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| 231 | 231 | | who has family coverage and is head of house-16 |
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| 232 | 232 | | hold, $8,000. 17 |
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| 233 | 233 | | ‘‘(3) L |
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| 234 | 234 | | IMITATION ON THIRD PARTY CONTRIBU -18 |
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| 235 | 235 | | TIONS.—A trust shall not be treated as a Hope Ac-19 |
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| 236 | 236 | | count under this section unless the aggregate of con-20 |
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| 237 | 237 | | tributions on behalf of the individual from all em-21 |
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| 238 | 238 | | ployers of the individual and from any Medicaid pro-22 |
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| 239 | 239 | | gram established and administered by a State or 23 |
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| 240 | 240 | | subdivision thereof, if approved by the Secretary of 24 |
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| 241 | 241 | | Health and Human Services under Section 1115 of 25 |
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| 243 | 243 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 9 |
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| 244 | 244 | | •HR 955 IH |
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| 245 | 245 | | the Social Security Act or Section 1332 of the Pa-1 |
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| 246 | 246 | | tient Protection and Affordable Care Act, will not be 2 |
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| 247 | 247 | | accepted in excess of 50 percent of the limit with re-3 |
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| 248 | 248 | | spect to such individual. 4 |
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| 249 | 249 | | ‘‘(4) N |
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| 250 | 250 | | O DEDUCTION.—No deduction shall be 5 |
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| 251 | 251 | | allowed for a contribution made by an eligible indi-6 |
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| 252 | 252 | | vidual to a HOPE Account maintained for the ben-7 |
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| 253 | 253 | | efit of such individual for any taxable year. 8 |
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| 254 | 254 | | ‘‘(5) E |
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| 255 | 255 | | XCLUSION FROM GROSS INCOME LIM -9 |
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| 256 | 256 | | ITED.—Any contribution under paragraph (c)(3) to 10 |
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| 257 | 257 | | the HOPE account of an individual whose adjusted 11 |
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| 258 | 258 | | gross income for the prior taxable year does not ex-12 |
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| 259 | 259 | | ceed $100,000 ($200,000 in the case of a married 13 |
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| 260 | 260 | | individual filing a joint return) shall be excluded 14 |
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| 261 | 261 | | from the individual’s adjusted gross income. 15 |
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| 262 | 262 | | ‘‘(6) C |
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| 263 | 263 | | OORDINATION WITH OTHER CONTRIBU -16 |
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| 264 | 264 | | TIONS.—The limitation which would (but for this 17 |
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| 265 | 265 | | paragraph) apply under this subsection to an indi-18 |
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| 266 | 266 | | vidual for any taxable year shall be reduced (but not 19 |
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| 267 | 267 | | below zero) by the sum of— 20 |
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| 268 | 268 | | ‘‘(A) the aggregate amount determined 21 |
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| 269 | 269 | | with respect to the individual for the taxable 22 |
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| 270 | 270 | | year under section 223(b)(4), 23 |
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| 271 | 271 | | ‘‘(B) the aggregate amount contributed by 24 |
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| 272 | 272 | | the individual to health savings accounts of the 25 |
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| 274 | 274 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 10 |
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| 275 | 275 | | •HR 955 IH |
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| 276 | 276 | | individual for such taxable year and not taken 1 |
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| 277 | 277 | | into account under subparagraph (A), 2 |
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| 278 | 278 | | ‘‘(C) the aggregate amount contributed to 3 |
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| 279 | 279 | | a HOPE Account of such individual by the in-4 |
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| 280 | 280 | | dividual’s employer, and 5 |
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| 281 | 281 | | ‘‘(D) the aggregate amount contributed to 6 |
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| 282 | 282 | | a HOPE Account of such individual for such 7 |
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| 283 | 283 | | taxable year by a program established and ad-8 |
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| 284 | 284 | | ministered by a State or subdivision thereof 9 |
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| 285 | 285 | | with respect to converted cost-sharing reduction 10 |
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| 286 | 286 | | payments. 11 |
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| 287 | 287 | | ‘‘(7) C |
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| 288 | 288 | | OST-OF-LIVING ADJUSTMENT .—In the 12 |
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| 289 | 289 | | case of any taxable year beginning in a calendar 13 |
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| 290 | 290 | | year after 2026, each dollar amount in paragraph 14 |
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| 291 | 291 | | (2) shall be increased by an amount equal to— 15 |
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| 292 | 292 | | ‘‘(A) such dollar amount, multiplied by 16 |
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| 293 | 293 | | ‘‘(B) the cost-of-living adjustment deter-17 |
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| 294 | 294 | | mined under section 1(f)(3) for the calendar 18 |
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| 295 | 295 | | year in which such taxable year begins deter-19 |
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| 296 | 296 | | mined— 20 |
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| 297 | 297 | | ‘‘(i) by substituting ‘calendar year 21 |
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| 298 | 298 | | 2025’ for ‘calendar year 2016’ in subpara-22 |
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| 299 | 299 | | graph (A)(ii) thereof, and 23 |
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| 300 | 300 | | ‘‘(ii) by substituting ‘March 31’ for 24 |
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| 301 | 301 | | ‘August 31’ in section 1(f)(4). 25 |
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| 303 | 303 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 11 |
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| 304 | 304 | | •HR 955 IH |
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| 305 | 305 | | The Secretary shall publish the adjusted 1 |
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| 306 | 306 | | amounts under paragraph (2) for taxable years 2 |
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| 307 | 307 | | beginning in any calendar year no later than 3 |
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| 308 | 308 | | June 1 of the preceding calendar year. If any 4 |
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| 309 | 309 | | increase under this paragraph is not a multiple 5 |
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| 310 | 310 | | of $50, such increase shall be rounded to the 6 |
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| 311 | 311 | | nearest multiple of $50. 7 |
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| 312 | 312 | | ‘‘(d) T |
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| 313 | 313 | | AXTREATMENT OFDISTRIBUTIONS.— 8 |
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| 314 | 314 | | ‘‘(1) A |
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| 315 | 315 | | MOUNTS USED FOR QUALIFIED MEDICAL 9 |
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| 316 | 316 | | EXPENSES.—Any amount paid or distributed out of 10 |
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| 317 | 317 | | a HOPE Account which is used exclusively to pay 11 |
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| 318 | 318 | | qualified medical expenses of any account beneficiary 12 |
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| 319 | 319 | | shall not be includible in gross income. 13 |
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| 320 | 320 | | ‘‘(2) D |
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| 321 | 321 | | ISTRIBUTION AND TAXATION OF 14 |
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| 322 | 322 | | AMOUNTS NOT USED FOR QUALIFIED MEDICAL EX -15 |
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| 323 | 323 | | PENSES.— 16 |
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| 324 | 324 | | ‘‘(A) I |
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| 325 | 325 | | N GENERAL.—Except as provided in 17 |
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| 326 | 326 | | subparagraph (B), no amount may be paid or 18 |
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| 327 | 327 | | distributed out of a HOPE Account which is 19 |
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| 328 | 328 | | not used exclusively to pay the qualified medical 20 |
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| 329 | 329 | | expenses of the account beneficiary. 21 |
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| 330 | 330 | | ‘‘(B) E |
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| 331 | 331 | | XCEPTION FOR CERTAIN DISTRIBU -22 |
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| 332 | 332 | | TIONS.—An amount may be paid or distributed 23 |
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| 333 | 333 | | out of a HOPE Account which is not used ex-24 |
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| 334 | 334 | | clusively to pay the qualified medical expenses 25 |
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| 336 | 336 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 12 |
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| 337 | 337 | | •HR 955 IH |
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| 338 | 338 | | of the account beneficiary if such distribution is 1 |
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| 339 | 339 | | reported to the Secretary pursuant to such reg-2 |
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| 340 | 340 | | ulations or other guidance the Secretary may 3 |
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| 341 | 341 | | prescribe, and the distribution is— 4 |
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| 342 | 342 | | ‘‘(i) made to an account beneficiary 5 |
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| 343 | 343 | | (or to the estate of the account bene-6 |
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| 344 | 344 | | ficiary) on or after the death of the indi-7 |
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| 345 | 345 | | vidual, or 8 |
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| 346 | 346 | | ‘‘(ii) attributable to the account bene-9 |
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| 347 | 347 | | ficiary being disabled (within the meaning 10 |
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| 348 | 348 | | of section 72(m)(7)). 11 |
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| 349 | 349 | | ‘‘(C) T |
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| 350 | 350 | | AXATION OF DISTRIBUTIONS NOT 12 |
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| 351 | 351 | | USED FOR QUALIFIED MEDICAL EXPENSES .— 13 |
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| 352 | 352 | | ‘‘(i) I |
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| 353 | 353 | | N GENERAL.—Any amount paid 14 |
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| 354 | 354 | | or distributed out of a HOPE Account 15 |
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| 355 | 355 | | which is not used exclusively to pay quali-16 |
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| 356 | 356 | | fied medical expenses of any account bene-17 |
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| 357 | 357 | | ficiary shall be includible in gross income, 18 |
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| 358 | 358 | | except to the extent such distribution is al-19 |
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| 359 | 359 | | locable to amounts described in subpara-20 |
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| 360 | 360 | | graph (D)(iii). 21 |
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| 361 | 361 | | ‘‘(ii) A |
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| 362 | 362 | | DDITIONAL TAX.—The tax im-22 |
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| 363 | 363 | | posed by this chapter on the account bene-23 |
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| 364 | 364 | | ficiary for any taxable year in which there 24 |
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| 365 | 365 | | is a payment or distribution from a HOPE 25 |
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| 367 | 367 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 13 |
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| 368 | 368 | | •HR 955 IH |
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| 369 | 369 | | Account of such beneficiary which is in-1 |
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| 370 | 370 | | cludible in gross income under clause (i) 2 |
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| 371 | 371 | | shall be increased by 30 percent of the 3 |
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| 372 | 372 | | amount which is so includible. 4 |
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| 373 | 373 | | ‘‘(D) O |
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| 374 | 374 | | RDERING OF DISTRIBUTIONS .—Any 5 |
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| 375 | 375 | | distributions out of a HOPE Account pursuant 6 |
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| 376 | 376 | | to subparagraph (B) shall be treated as made 7 |
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| 377 | 377 | | from amounts to the extent that the amount of 8 |
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| 378 | 378 | | such distribution, when added to all previous 9 |
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| 379 | 379 | | distributions from the HOPE Account, does not 10 |
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| 380 | 380 | | exceed the aggregate of such amount, and from 11 |
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| 381 | 381 | | such amounts pursuant to the following order-12 |
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| 382 | 382 | | ing rules: 13 |
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| 383 | 383 | | ‘‘(i) from earnings, if any, on such 14 |
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| 384 | 384 | | amounts described in clauses (ii) and (iii), 15 |
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| 385 | 385 | | ‘‘(ii) from contributions described in 16 |
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| 386 | 386 | | subsection (c)(3), 17 |
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| 387 | 387 | | ‘‘(iii) from contributions by an eligible 18 |
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| 388 | 388 | | individual to the HOPE Account, and 19 |
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| 389 | 389 | | ‘‘(iv) from rollover contributions to 20 |
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| 390 | 390 | | the HOPE Account from another HOPE 21 |
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| 391 | 391 | | Account allocable to contributions by an el-22 |
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| 392 | 392 | | igible individual to such other HOPE Ac-23 |
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| 393 | 393 | | count, on a first-in, first-out basis. 24 |
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| 395 | 395 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 14 |
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| 396 | 396 | | •HR 955 IH |
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| 397 | 397 | | ‘‘(3) EXCESS CONTRIBUTIONS RETURNED BE -1 |
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| 398 | 398 | | FORE DUE DATE OF RETURN .— 2 |
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| 399 | 399 | | ‘‘(A) I |
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| 400 | 400 | | N GENERAL.—If any excess con-3 |
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| 401 | 401 | | tribution is contributed for a taxable year to 4 |
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| 402 | 402 | | any HOPE Account of an individual, paragraph 5 |
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| 403 | 403 | | (2) shall not apply to distributions from the 6 |
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| 404 | 404 | | HOPE Accounts of such individual (to the ex-7 |
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| 405 | 405 | | tent such distributions do not exceed the aggre-8 |
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| 406 | 406 | | gate excess contributions to all such accounts of 9 |
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| 407 | 407 | | such individual for such year) if— 10 |
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| 408 | 408 | | ‘‘(i) such distribution is received by 11 |
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| 409 | 409 | | the individual on or before the last day 12 |
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| 410 | 410 | | prescribed by law (including extensions of 13 |
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| 411 | 411 | | time) for filing such individual’s return for 14 |
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| 412 | 412 | | such taxable year, and 15 |
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| 413 | 413 | | ‘‘(ii) such distribution is accompanied 16 |
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| 414 | 414 | | by the amount of net income attributable 17 |
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| 415 | 415 | | to such excess contribution. 18 |
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| 416 | 416 | | Any net income described in clause (ii) shall be 19 |
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| 417 | 417 | | included in the gross income of the individual 20 |
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| 418 | 418 | | for the taxable year in which it is received. 21 |
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| 419 | 419 | | ‘‘(B) E |
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| 420 | 420 | | XCESS CONTRIBUTION .—For pur-22 |
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| 421 | 421 | | poses of subparagraph (A), the term ‘excess 23 |
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| 422 | 422 | | contribution’ means any contribution (other 24 |
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| 423 | 423 | | than a rollover contribution described in para-25 |
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| 425 | 425 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 15 |
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| 426 | 426 | | •HR 955 IH |
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| 427 | 427 | | graph (4)) which is neither excludable from 1 |
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| 428 | 428 | | gross income under section 106(h) nor allow-2 |
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| 429 | 429 | | able under this section. 3 |
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| 430 | 430 | | ‘‘(4) R |
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| 431 | 431 | | OLLOVER CONTRIBUTION .—An amount is 4 |
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| 432 | 432 | | described in this paragraph as a rollover contribu-5 |
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| 433 | 433 | | tion if it meets the requirements of subparagraphs 6 |
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| 434 | 434 | | (A) and (B). 7 |
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| 435 | 435 | | ‘‘(A) I |
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| 436 | 436 | | N GENERAL.—Paragraph (2) shall 8 |
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| 437 | 437 | | not apply to any amount paid or distributed 9 |
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| 438 | 438 | | from a HOPE Account to the account bene-10 |
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| 439 | 439 | | ficiary to the extent the amount received is paid 11 |
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| 440 | 440 | | into a HOPE Account for the benefit of such 12 |
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| 441 | 441 | | beneficiary, the beneficiary’s spouse or the 13 |
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| 442 | 442 | | beneficiary’s dependent not later than the 60th 14 |
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| 443 | 443 | | day after the day on which the beneficiary re-15 |
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| 444 | 444 | | ceives the payment or distribution. 16 |
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| 445 | 445 | | ‘‘(B) L |
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| 446 | 446 | | IMITATION.—This paragraph shall 17 |
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| 447 | 447 | | not apply to any amount described in subpara-18 |
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| 448 | 448 | | graph (A) received by an individual from a 19 |
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| 449 | 449 | | HOPE Account if, at any time during the 1- 20 |
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| 450 | 450 | | year period ending on the day of such receipt, 21 |
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| 451 | 451 | | such individual received any other amount de-22 |
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| 452 | 452 | | scribed in subparagraph (A) from a HOPE Ac-23 |
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| 453 | 453 | | count which was not includible in the individ-24 |
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| 455 | 455 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 16 |
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| 456 | 456 | | •HR 955 IH |
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| 457 | 457 | | ual’s gross income because of the application of 1 |
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| 458 | 458 | | this paragraph. 2 |
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| 459 | 459 | | ‘‘(C) D |
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| 460 | 460 | | EPENDENT.—The term dependent 3 |
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| 461 | 461 | | means any individual with respect to whom a 4 |
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| 462 | 462 | | deduction under section 151 is allowed to an-5 |
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| 463 | 463 | | other taxpayer for a taxable year beginning in 6 |
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| 464 | 464 | | the calendar year in which such individual’s 7 |
|---|
| 465 | 465 | | taxable year begins. 8 |
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| 466 | 466 | | ‘‘(5) C |
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| 467 | 467 | | OORDINATION WITH MEDICAL EXPENSE 9 |
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| 468 | 468 | | DEDUCTION.—For purposes of determining the 10 |
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| 469 | 469 | | amount of the deduction under section 213, any pay-11 |
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| 470 | 470 | | ment or distribution out of a HOPE Account for 12 |
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| 471 | 471 | | qualified medical expenses shall not be treated as an 13 |
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| 472 | 472 | | expense paid for medical care. 14 |
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| 473 | 473 | | ‘‘(e) R |
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| 474 | 474 | | EPORTS.—The Secretary shall require the 15 |
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| 475 | 475 | | trustee of a HOPE Account to make such reports regard-16 |
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| 476 | 476 | | ing such account to the Secretary and to the account bene-17 |
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| 477 | 477 | | ficiary with respect to contributions, distributions, the re-18 |
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| 478 | 478 | | turn of excess contributions, and such other matters as 19 |
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| 479 | 479 | | the Secretary determines appropriate. The trustee shall in-20 |
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| 480 | 480 | | clude in each such report an accounting of the amount 21 |
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| 481 | 481 | | contributed by the account beneficiary, and may, if nec-22 |
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| 482 | 482 | | essary to determine such amount, request such informa-23 |
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| 483 | 483 | | tion from the account beneficiary.’’. 24 |
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| 485 | 485 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 17 |
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| 486 | 486 | | •HR 955 IH |
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| 487 | 487 | | (2) CLERICAL AMENDMENT .—The table of sec-1 |
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| 488 | 488 | | tions for part VIII of subchapter F of chapter 1 of 2 |
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| 489 | 489 | | such Code is amended by adding at the end the fol-3 |
|---|
| 490 | 490 | | lowing new item: 4 |
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| 491 | 491 | | ‘‘Sec. 530A. HOPE Accounts.’’. |
|---|
| 492 | 492 | | (b) EXCESSCONTRIBUTIONS.— 5 |
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| 493 | 493 | | (1) I |
|---|
| 494 | 494 | | N GENERAL.—Section 4973(a) of such 6 |
|---|
| 495 | 495 | | Code is amended by striking ‘‘or’’ at the end of 7 |
|---|
| 496 | 496 | | paragraph (5), by striking the period at the end of 8 |
|---|
| 497 | 497 | | paragraph (6) and inserting ‘‘, and’’, and by insert-9 |
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| 498 | 498 | | ing after paragraph (6) (as so amended) the fol-10 |
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| 499 | 499 | | lowing new paragraph: 11 |
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| 500 | 500 | | ‘‘(7) A HOPE Account (as defined in section 12 |
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| 501 | 501 | | 530A(b)).’’. 13 |
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| 502 | 502 | | (2) E |
|---|
| 503 | 503 | | XCESS CONTRIBUTIONS DEFINED .—Sec-14 |
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| 504 | 504 | | tion 4973 of such Code is amended by adding at the 15 |
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| 505 | 505 | | end the following new subsection: 16 |
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| 506 | 506 | | ‘‘(i) E |
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| 507 | 507 | | XCESSCONTRIBUTIONS TO HOPE AC-17 |
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| 508 | 508 | | COUNT.— 18 |
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| 509 | 509 | | ‘‘(1) I |
|---|
| 510 | 510 | | N GENERAL.—For purposes of this sec-19 |
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| 511 | 511 | | tion, in the case of HOPE Accounts (within the 20 |
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| 512 | 512 | | meaning of section 530A(b)), the term ‘‘excess con-21 |
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| 513 | 513 | | tributions’’ means the sum of— 22 |
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| 514 | 514 | | ‘‘(A) The aggregate amount contributed 23 |
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| 515 | 515 | | for the taxable year to the accounts (other than 24 |
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| 516 | 516 | | a rollover contribution described in section 25 |
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| 518 | 518 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 18 |
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| 519 | 519 | | •HR 955 IH |
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| 520 | 520 | | 530A(d)(4)) which exceeds the contributions 1 |
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| 521 | 521 | | limits under section 530A(c), and 2 |
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| 522 | 522 | | ‘‘(B) the amount determined under this 3 |
|---|
| 523 | 523 | | subsection for the preceding taxable year, re-4 |
|---|
| 524 | 524 | | duced by the sum of— 5 |
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| 525 | 525 | | ‘‘(i) the distributions out of the ac-6 |
|---|
| 526 | 526 | | counts which were included in gross in-7 |
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| 527 | 527 | | come under section 530A(d)(2)(C), and 8 |
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| 528 | 528 | | ‘‘(ii) the excess (if any) of— 9 |
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| 529 | 529 | | ‘‘(I) the maximum amount of al-10 |
|---|
| 530 | 530 | | lowable contributions under 530A(c) 11 |
|---|
| 531 | 531 | | for the taxable year, over 12 |
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| 532 | 532 | | ‘‘(II) the amount contributed to 13 |
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| 533 | 533 | | the accounts for the taxable year. 14 |
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| 534 | 534 | | ‘‘(2) R |
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| 535 | 535 | | ETURNED EXCESS CONTRIBUTIONS .—For 15 |
|---|
| 536 | 536 | | purposes of this subsection, any contribution which 16 |
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| 537 | 537 | | is distributed out of the HOPE Account in a dis-17 |
|---|
| 538 | 538 | | tribution to which section 530A(d)(2)(C) applies 18 |
|---|
| 539 | 539 | | shall be treated as an amount not contributed.’’. 19 |
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| 540 | 540 | | (c) E |
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| 541 | 541 | | MPLOYERCONTRIBUTIONS.— 20 |
|---|
| 542 | 542 | | (1) I |
|---|
| 543 | 543 | | N GENERAL.—Section 106 of such Code is 21 |
|---|
| 544 | 544 | | amended by adding at the end the following new 22 |
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| 545 | 545 | | subsection: 23 |
|---|
| 546 | 546 | | ‘‘(h) C |
|---|
| 547 | 547 | | ONTRIBUTIONS TOHOPE ACCOUNTS.— 24 |
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| 549 | 549 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 19 |
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| 550 | 550 | | •HR 955 IH |
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| 551 | 551 | | ‘‘(1) IN GENERAL.—In the case of an employee 1 |
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| 552 | 552 | | who is an eligible individual, amounts contributed by 2 |
|---|
| 553 | 553 | | such employee’s employer to any HOPE account (as 3 |
|---|
| 554 | 554 | | defined in section 530A(b)) of such employee shall 4 |
|---|
| 555 | 555 | | be treated as employer-provided coverage for medical 5 |
|---|
| 556 | 556 | | expenses under an accident or health plan to the ex-6 |
|---|
| 557 | 557 | | tent such amounts do not exceed the limitations ap-7 |
|---|
| 558 | 558 | | plicable to such individual for such taxable year 8 |
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| 559 | 559 | | under section 530A(c) (determined without regard to 9 |
|---|
| 560 | 560 | | this subsection). 10 |
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| 561 | 561 | | ‘‘(2) L |
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| 562 | 562 | | IMITATION.—Paragraph (1) shall not 11 |
|---|
| 563 | 563 | | apply in the case of a taxpayer whose adjusted gross 12 |
|---|
| 564 | 564 | | income for the taxable year exceeds $100,000 13 |
|---|
| 565 | 565 | | ($200,000 in the case of a joint return). 14 |
|---|
| 566 | 566 | | ‘‘(3) S |
|---|
| 567 | 567 | | PECIAL RULES.—Rules similar to the 15 |
|---|
| 568 | 568 | | rules of paragraphs (2), (3), (4), and (5) of sub-16 |
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| 569 | 569 | | section (b) shall apply for purposes of this sub-17 |
|---|
| 570 | 570 | | section. 18 |
|---|
| 571 | 571 | | ‘‘(4) C |
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| 572 | 572 | | ROSS REFERENCE.—For penalty on fail-19 |
|---|
| 573 | 573 | | ure by employer to make comparable contributions 20 |
|---|
| 574 | 574 | | to the health savings accounts of comparable em-21 |
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| 575 | 575 | | ployees, see section 4980G.’’. 22 |
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| 576 | 576 | | (2) I |
|---|
| 577 | 577 | | NFORMATION REPORTING FOR EMPLOY -23 |
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| 578 | 578 | | EES.—Section 6051(a) is amended by striking 24 |
|---|
| 579 | 579 | | ‘‘and’’ at the end of paragraph (16), by striking the 25 |
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| 581 | 581 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 20 |
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| 582 | 582 | | •HR 955 IH |
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| 583 | 583 | | period at the end of paragraph (17) and inserting ‘‘, 1 |
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| 584 | 584 | | and’’, and by inserting after paragraph (17) (as so 2 |
|---|
| 585 | 585 | | amended) the following new paragraph: 3 |
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| 586 | 586 | | ‘‘(18) the amount contributed to any HOPE 4 |
|---|
| 587 | 587 | | Account (as defined in section 530A(b)) of such em-5 |
|---|
| 588 | 588 | | ployee.’’. 6 |
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| 589 | 589 | | (3) C |
|---|
| 590 | 590 | | ONFORMING AMENDMENT RELATING TO 7 |
|---|
| 591 | 591 | | CAFETERIA PLANS.—Section 125(f)(1) of such Code 8 |
|---|
| 592 | 592 | | is amended by inserting ‘‘106(h),’’ after ‘‘106(b),’’. 9 |
|---|
| 593 | 593 | | (d) F |
|---|
| 594 | 594 | | AILURE OFEMPLOYERTOMAKECOMPARABLE 10 |
|---|
| 595 | 595 | | HOPE A |
|---|
| 596 | 596 | | CCOUNTCONTRIBUTIONS.— 11 |
|---|
| 597 | 597 | | (1) I |
|---|
| 598 | 598 | | N GENERAL.—Section 4980G(a) of such 12 |
|---|
| 599 | 599 | | Code is amended by inserting ‘‘or HOPE Account’’ 13 |
|---|
| 600 | 600 | | after ‘‘health savings account’’. 14 |
|---|
| 601 | 601 | | (2) C |
|---|
| 602 | 602 | | ONFORMING AMENDMENTS .— 15 |
|---|
| 603 | 603 | | (A) Section 4980G(c) of such Code is 16 |
|---|
| 604 | 604 | | amended by striking ‘‘and health savings ac-17 |
|---|
| 605 | 605 | | counts’’ and inserting ‘‘, health savings ac-18 |
|---|
| 606 | 606 | | counts, or HOPE Accounts’’. 19 |
|---|
| 607 | 607 | | (B) Section 4980G(d) of such Code is 20 |
|---|
| 608 | 608 | | amended by inserting ‘‘or HOPE Account’’ 21 |
|---|
| 609 | 609 | | after ‘‘health savings account’’. 22 |
|---|
| 610 | 610 | | (C) The heading for section 4980G of such 23 |
|---|
| 611 | 611 | | Code is amended by inserting ‘‘ |
|---|
| 612 | 612 | | OR HOPE AC -24 |
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| 614 | 614 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 21 |
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| 615 | 615 | | •HR 955 IH |
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| 616 | 616 | | COUNT’’ after ‘‘HEALTH SAVINGS AC -1 |
|---|
| 617 | 617 | | COUNT’’. 2 |
|---|
| 618 | 618 | | (D) The table of sections for chapter 43 of 3 |
|---|
| 619 | 619 | | such Code is amended by striking the item re-4 |
|---|
| 620 | 620 | | lating to section 4980G and inserting the fol-5 |
|---|
| 621 | 621 | | lowing new item: 6 |
|---|
| 622 | 622 | | ‘‘Sec. 4980G. Failure of employer to make comparable health savings account |
|---|
| 623 | 623 | | or HOPE Account contributions.’’. |
|---|
| 624 | 624 | | (e) APPLICATION OF PROHIBITEDTRANSACTION 7 |
|---|
| 625 | 625 | | R |
|---|
| 626 | 626 | | ULES.— 8 |
|---|
| 627 | 627 | | (1) I |
|---|
| 628 | 628 | | N GENERAL.—Section 4975(e)(1) of such 9 |
|---|
| 629 | 629 | | Code is amended by striking ‘‘or’’ at the end of sub-10 |
|---|
| 630 | 630 | | paragraph (F), by redesignating subparagraph (G) 11 |
|---|
| 631 | 631 | | as subparagraph (H), and by inserting after sub-12 |
|---|
| 632 | 632 | | paragraph (F), as so amended, the following new 13 |
|---|
| 633 | 633 | | subparagraph: 14 |
|---|
| 634 | 634 | | ‘‘(G) a HOPE Account described in section 15 |
|---|
| 635 | 635 | | 530A(b), or’’. 16 |
|---|
| 636 | 636 | | (f) F |
|---|
| 637 | 637 | | AILURETOREPORT.—Section 6693(a)(2) of 17 |
|---|
| 638 | 638 | | such Code is amended by striking ‘‘and’’ at the end of 18 |
|---|
| 639 | 639 | | subparagraph (E), by striking the period at the end of 19 |
|---|
| 640 | 640 | | subparagraph (F) and inserting ‘‘, and’’, and by inserting 20 |
|---|
| 641 | 641 | | after subparagraph (F) (as so amended) the following new 21 |
|---|
| 642 | 642 | | subparagraph: 22 |
|---|
| 643 | 643 | | ‘‘(G) Section 530A(e) (relating to HOPE 23 |
|---|
| 644 | 644 | | Accounts).’’. 24 |
|---|
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| 646 | 646 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 22 |
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| 647 | 647 | | •HR 955 IH |
|---|
| 648 | 648 | | (g) EFFECTIVEDATE.—The amendments made by 1 |
|---|
| 649 | 649 | | this section shall apply to taxable years beginning after 2 |
|---|
| 650 | 650 | | December 31, 2025. 3 |
|---|
| 651 | 651 | | Æ |
|---|
| 652 | 652 | | VerDate Sep 11 2014 04:12 Mar 01, 2025 Jkt 059200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6301 E:\BILLS\H955.IH H955 |
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| 653 | 653 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB |
|---|