I
119THCONGRESS
1
STSESSION H. R. 955
To amend the Internal Revenue Code of 1986 to reform health provisions,
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY4, 2025
Mr. M
OOREof Utah (for himself, Mr. PANETTA, Mr. FITZPATRICK, Mr.
S
CHNEIDER, Mr. SMITHof Nebraska, Mr. RUIZ, Mr. VALADAO, Mrs.
D
INGELL, Mr. MOOLENAAR, and Mr. DAVISof North Carolina) intro-
duced the following bill; which was referred to the Committee on Ways
and Means
A BILL
To amend the Internal Revenue Code of 1986 to reform
health provisions, and for other purposes.
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 ‘‘Health Out-of-Pocket 4
Expense Act of 2025’’ or the ‘‘HOPE Act of 2025’’. 5
SEC. 2. HOPE ACCOUNTS. 6
(a) A
CCOUNTSESTABLISHED.— 7
(1) I
N GENERAL.—Part VIII of subchapter F 8
of chapter 1 of the Internal Revenue Code of 1986 9
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is amended by adding at the end the following new 1
section: 2
‘‘SEC. 530A. HOPE ACCOUNTS. 3
‘‘(a) I
NGENERAL.—A HOPE Account shall be ex-4
empt from taxation under this subtitle. Notwithstanding 5
the preceding sentence, the Hope Account shall be subject 6
to the taxes imposed by section 511 (relating to the impo-7
sition of tax on unrelated business income of charitable 8
organizations). 9
‘‘(b) D
EFINITIONS ANDSPECIALRULES.—For pur-10
poses of this section— 11
‘‘(1) HOPE
ACCOUNT.—The term ‘HOPE Ac-12
count’ means a trust created or organized in the 13
United States as a HOPE Account exclusively for 14
the purpose of paying the qualified medical expenses 15
of the account beneficiary, but only if the written 16
governing instrument creating the trust meets the 17
following requirements: 18
‘‘(A) Except in the case of a rollover con-19
tribution described in subsection (d)(4) of this 20
section, no contribution will be accepted— 21
‘‘(i) unless it is in cash, or 22
‘‘(ii) to the extent such contribution, 23
when added to previous contributions to 24
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the trust for the calendar year, exceeds the 1
contribution limitations in subsection (c). 2
‘‘(B) The trustee is a bank (as defined in 3
section 408(n)), an insurance company (as de-4
fined in section 816), or another person who 5
demonstrates to the satisfaction of the Sec-6
retary that the manner in which such person 7
will administer the trust will be consistent with 8
the requirements of this section. 9
‘‘(C) No part of the trust assets will be in-10
vested in life insurance contracts. 11
‘‘(D) The assets of the trust will not be 12
commingled with other property except in a 13
common trust fund or common investment 14
fund. 15
‘‘(E) The interest of an individual in the 16
balance in the individual’s account is nonforfeit-17
able. 18
‘‘(F) No more than reasonable fees are 19
paid in connection with the administration of 20
the account. 21
‘‘(G) The trust includes procedures for the 22
trustee to reasonably assure that distributions 23
are limited to payment or reimbursement for 24
qualified medical expenses incurred after the es-25
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tablishment of the trust. Procedures shall be 1
considered reasonable that meet the substan-2
tiation requirements contained in Proposed 3
Treasury Regulation section 1.125–6 (as in ef-4
fect on January 1, 2025) or under any super-5
seding guidance prescribed by the Secretary. 6
‘‘(H) The trust follows all reporting re-7
quirements as may be prescribed by the Sec-8
retary with respect to distributions that are not 9
substantiated as qualified medical expenses pur-10
suant to this section. 11
‘‘(I) The trust follows any other guidance 12
with respect to HOPE Accounts prescribed by 13
the Secretary. 14
‘‘(J) Except as provided in subsection 15
(d)(2)(B), amounts held by the trust may not 16
be distributable other than exclusively to pay 17
the qualified medical expenses of the account 18
beneficiary, spouse or dependents. 19
‘‘(K) The trust reports all contributions on 20
Form 5498–A, or such other form as is re-21
quired by the Secretary. The trust annually 22
must also— 23
‘‘(i) request each account owner to 24
provide the trust with the amount if any, 25
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the account owner contributed to an FSA 1
for the year, and 2
‘‘(ii) report such amount on Form 3
5498–A or such other form as is required 4
by the Secretary. 5
‘‘(2) E
LIGIBLE INDIVIDUAL.— 6
‘‘(A) I
N GENERAL.—The term ‘eligible in-7
dividual’ means, with respect to any month, any 8
individual if for such month such individual 9
meets the requirements of subparagraphs (B) 10
and (C). 11
‘‘(B) C
OVERAGE REQUIREMENT .—An indi-12
vidual meets the requirements of this subpara-13
graph for a month if such individual is covered 14
under one of the following types of coverage as 15
of the 1st day of such month: 16
‘‘(i) Minimum essential coverage (as 17
defined in section 5000A(f)). 18
‘‘(ii) With respect to members of fed-19
erally recognized American Indian and 20
Alaska Native Tribes and their descend-21
ants, the Indian Health Service. 22
‘‘(C) O
THER COVERAGE.— 23
‘‘(i) I
N GENERAL.—An individual 24
meets the requirements of this subpara-25
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graph for a month if during such month 1
no amounts are contributed by or on be-2
half of the individual to any of the fol-3
lowing accounts of such individual: 4
‘‘(I) A health flexible spending 5
arrangement. 6
‘‘(II) A health savings account 7
(as defined in section 223(d)). 8
‘‘(III) A health reimbursement 9
arrangement which is treated as em-10
ployer-provided coverage under an ac-11
cident or health plan for purposes of 12
section 106. 13
‘‘(IV) An Archer MSA (as de-14
fined in section 220(d)). 15
‘‘(ii) E
XCEPTION FOR CERTAIN DIS -16
REGARDED COVERAGE .—Clause (i) shall 17
not apply in the case of an account de-18
scribed therein if for the month such ac-19
count constitutes coverage described in sec-20
tion 223(c)(1)(B). 21
‘‘(3) Q
UALIFIED MEDICAL EXPENSES .—The 22
term ‘qualified medical expenses’ has the meaning 23
given such term in section 223(d)(2). 24
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‘‘(4) ACCOUNT BENEFICIARY .—The term ‘ac-1
count beneficiary’ means the individual on whose be-2
half the HOPE Account was established. 3
‘‘(5) A
CCOUNT TERMINATIONS .—Rules similar 4
to the rules of paragraphs (2) and (4) of section 5
408(e) shall apply to HOPE Accounts, and any 6
amount treated as distributed under such rules shall 7
be treated as not used to pay qualified medical ex-8
penses. 9
‘‘(6) C
ERTAIN RULES TO APPLY .—Rules similar 10
to the following rules shall apply for purposes of this 11
section: 12
‘‘(A) Section 219(f)(3) (relating to time 13
when contributions deemed made). 14
‘‘(B) Except as provided in section 106(h), 15
section 219(f)(5) (relating to employer pay-16
ments). 17
‘‘(C) Section 408(g) (relating to commu-18
nity property laws). 19
‘‘(D) Section 408(h) (relating to custodial 20
accounts). 21
‘‘(E) Section 223(f)(7) (relating to trans-22
fer of account incident of divorce). 23
‘‘(F) Section 223(f)(8) (relating to treat-24
ment after death of account beneficiary). 25
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‘‘(c) CONTRIBUTIONLIMITATIONS.— 1
‘‘(1) I
N GENERAL.—The aggregate amount of 2
contributions from all sources to all HOPE Accounts 3
maintained for the benefit of an eligible individual 4
for any taxable year shall not exceed the sum of the 5
monthly limitations for months during such taxable 6
year that the individual is an eligible individual. 7
‘‘(2) M
ONTHLY LIMITATION.—The monthly lim-8
itation for any month is
1
⁄12of— 9
‘‘(A) in the case of an eligible individual 10
who has self-only coverage, or an eligible indi-11
vidual that is married filing separately or mar-12
ried filing jointly that has family coverage, 13
$4,000, or 14
‘‘(B) in the case of an eligible individual 15
who has family coverage and is head of house-16
hold, $8,000. 17
‘‘(3) L
IMITATION ON THIRD PARTY CONTRIBU -18
TIONS.—A trust shall not be treated as a Hope Ac-19
count under this section unless the aggregate of con-20
tributions on behalf of the individual from all em-21
ployers of the individual and from any Medicaid pro-22
gram established and administered by a State or 23
subdivision thereof, if approved by the Secretary of 24
Health and Human Services under Section 1115 of 25
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the Social Security Act or Section 1332 of the Pa-1
tient Protection and Affordable Care Act, will not be 2
accepted in excess of 50 percent of the limit with re-3
spect to such individual. 4
‘‘(4) N
O DEDUCTION.—No deduction shall be 5
allowed for a contribution made by an eligible indi-6
vidual to a HOPE Account maintained for the ben-7
efit of such individual for any taxable year. 8
‘‘(5) E
XCLUSION FROM GROSS INCOME LIM -9
ITED.—Any contribution under paragraph (c)(3) to 10
the HOPE account of an individual whose adjusted 11
gross income for the prior taxable year does not ex-12
ceed $100,000 ($200,000 in the case of a married 13
individual filing a joint return) shall be excluded 14
from the individual’s adjusted gross income. 15
‘‘(6) C
OORDINATION WITH OTHER CONTRIBU -16
TIONS.—The limitation which would (but for this 17
paragraph) apply under this subsection to an indi-18
vidual for any taxable year shall be reduced (but not 19
below zero) by the sum of— 20
‘‘(A) the aggregate amount determined 21
with respect to the individual for the taxable 22
year under section 223(b)(4), 23
‘‘(B) the aggregate amount contributed by 24
the individual to health savings accounts of the 25
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individual for such taxable year and not taken 1
into account under subparagraph (A), 2
‘‘(C) the aggregate amount contributed to 3
a HOPE Account of such individual by the in-4
dividual’s employer, and 5
‘‘(D) the aggregate amount contributed to 6
a HOPE Account of such individual for such 7
taxable year by a program established and ad-8
ministered by a State or subdivision thereof 9
with respect to converted cost-sharing reduction 10
payments. 11
‘‘(7) C
OST-OF-LIVING ADJUSTMENT .—In the 12
case of any taxable year beginning in a calendar 13
year after 2026, each dollar amount in paragraph 14
(2) shall be increased by an amount equal to— 15
‘‘(A) such dollar amount, multiplied by 16
‘‘(B) the cost-of-living adjustment deter-17
mined under section 1(f)(3) for the calendar 18
year in which such taxable year begins deter-19
mined— 20
‘‘(i) by substituting ‘calendar year 21
2025’ for ‘calendar year 2016’ in subpara-22
graph (A)(ii) thereof, and 23
‘‘(ii) by substituting ‘March 31’ for 24
‘August 31’ in section 1(f)(4). 25
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The Secretary shall publish the adjusted 1
amounts under paragraph (2) for taxable years 2
beginning in any calendar year no later than 3
June 1 of the preceding calendar year. If any 4
increase under this paragraph is not a multiple 5
of $50, such increase shall be rounded to the 6
nearest multiple of $50. 7
‘‘(d) T
AXTREATMENT OFDISTRIBUTIONS.— 8
‘‘(1) A
MOUNTS USED FOR QUALIFIED MEDICAL 9
EXPENSES.—Any amount paid or distributed out of 10
a HOPE Account which is used exclusively to pay 11
qualified medical expenses of any account beneficiary 12
shall not be includible in gross income. 13
‘‘(2) D
ISTRIBUTION AND TAXATION OF 14
AMOUNTS NOT USED FOR QUALIFIED MEDICAL EX -15
PENSES.— 16
‘‘(A) I
N GENERAL.—Except as provided in 17
subparagraph (B), no amount may be paid or 18
distributed out of a HOPE Account which is 19
not used exclusively to pay the qualified medical 20
expenses of the account beneficiary. 21
‘‘(B) E
XCEPTION FOR CERTAIN DISTRIBU -22
TIONS.—An amount may be paid or distributed 23
out of a HOPE Account which is not used ex-24
clusively to pay the qualified medical expenses 25
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of the account beneficiary if such distribution is 1
reported to the Secretary pursuant to such reg-2
ulations or other guidance the Secretary may 3
prescribe, and the distribution is— 4
‘‘(i) made to an account beneficiary 5
(or to the estate of the account bene-6
ficiary) on or after the death of the indi-7
vidual, or 8
‘‘(ii) attributable to the account bene-9
ficiary being disabled (within the meaning 10
of section 72(m)(7)). 11
‘‘(C) T
AXATION OF DISTRIBUTIONS NOT 12
USED FOR QUALIFIED MEDICAL EXPENSES .— 13
‘‘(i) I
N GENERAL.—Any amount paid 14
or distributed out of a HOPE Account 15
which is not used exclusively to pay quali-16
fied medical expenses of any account bene-17
ficiary shall be includible in gross income, 18
except to the extent such distribution is al-19
locable to amounts described in subpara-20
graph (D)(iii). 21
‘‘(ii) A
DDITIONAL TAX.—The tax im-22
posed by this chapter on the account bene-23
ficiary for any taxable year in which there 24
is a payment or distribution from a HOPE 25
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Account of such beneficiary which is in-1
cludible in gross income under clause (i) 2
shall be increased by 30 percent of the 3
amount which is so includible. 4
‘‘(D) O
RDERING OF DISTRIBUTIONS .—Any 5
distributions out of a HOPE Account pursuant 6
to subparagraph (B) shall be treated as made 7
from amounts to the extent that the amount of 8
such distribution, when added to all previous 9
distributions from the HOPE Account, does not 10
exceed the aggregate of such amount, and from 11
such amounts pursuant to the following order-12
ing rules: 13
‘‘(i) from earnings, if any, on such 14
amounts described in clauses (ii) and (iii), 15
‘‘(ii) from contributions described in 16
subsection (c)(3), 17
‘‘(iii) from contributions by an eligible 18
individual to the HOPE Account, and 19
‘‘(iv) from rollover contributions to 20
the HOPE Account from another HOPE 21
Account allocable to contributions by an el-22
igible individual to such other HOPE Ac-23
count, on a first-in, first-out basis. 24
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‘‘(3) EXCESS CONTRIBUTIONS RETURNED BE -1
FORE DUE DATE OF RETURN .— 2
‘‘(A) I
N GENERAL.—If any excess con-3
tribution is contributed for a taxable year to 4
any HOPE Account of an individual, paragraph 5
(2) shall not apply to distributions from the 6
HOPE Accounts of such individual (to the ex-7
tent such distributions do not exceed the aggre-8
gate excess contributions to all such accounts of 9
such individual for such year) if— 10
‘‘(i) such distribution is received by 11
the individual on or before the last day 12
prescribed by law (including extensions of 13
time) for filing such individual’s return for 14
such taxable year, and 15
‘‘(ii) such distribution is accompanied 16
by the amount of net income attributable 17
to such excess contribution. 18
Any net income described in clause (ii) shall be 19
included in the gross income of the individual 20
for the taxable year in which it is received. 21
‘‘(B) E
XCESS CONTRIBUTION .—For pur-22
poses of subparagraph (A), the term ‘excess 23
contribution’ means any contribution (other 24
than a rollover contribution described in para-25
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graph (4)) which is neither excludable from 1
gross income under section 106(h) nor allow-2
able under this section. 3
‘‘(4) R
OLLOVER CONTRIBUTION .—An amount is 4
described in this paragraph as a rollover contribu-5
tion if it meets the requirements of subparagraphs 6
(A) and (B). 7
‘‘(A) I
N GENERAL.—Paragraph (2) shall 8
not apply to any amount paid or distributed 9
from a HOPE Account to the account bene-10
ficiary to the extent the amount received is paid 11
into a HOPE Account for the benefit of such 12
beneficiary, the beneficiary’s spouse or the 13
beneficiary’s dependent not later than the 60th 14
day after the day on which the beneficiary re-15
ceives the payment or distribution. 16
‘‘(B) L
IMITATION.—This paragraph shall 17
not apply to any amount described in subpara-18
graph (A) received by an individual from a 19
HOPE Account if, at any time during the 1- 20
year period ending on the day of such receipt, 21
such individual received any other amount de-22
scribed in subparagraph (A) from a HOPE Ac-23
count which was not includible in the individ-24
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ual’s gross income because of the application of 1
this paragraph. 2
‘‘(C) D
EPENDENT.—The term dependent 3
means any individual with respect to whom a 4
deduction under section 151 is allowed to an-5
other taxpayer for a taxable year beginning in 6
the calendar year in which such individual’s 7
taxable year begins. 8
‘‘(5) C
OORDINATION WITH MEDICAL EXPENSE 9
DEDUCTION.—For purposes of determining the 10
amount of the deduction under section 213, any pay-11
ment or distribution out of a HOPE Account for 12
qualified medical expenses shall not be treated as an 13
expense paid for medical care. 14
‘‘(e) R
EPORTS.—The Secretary shall require the 15
trustee of a HOPE Account to make such reports regard-16
ing such account to the Secretary and to the account bene-17
ficiary with respect to contributions, distributions, the re-18
turn of excess contributions, and such other matters as 19
the Secretary determines appropriate. The trustee shall in-20
clude in each such report an accounting of the amount 21
contributed by the account beneficiary, and may, if nec-22
essary to determine such amount, request such informa-23
tion from the account beneficiary.’’. 24
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(2) CLERICAL AMENDMENT .—The table of sec-1
tions for part VIII of subchapter F of chapter 1 of 2
such Code is amended by adding at the end the fol-3
lowing new item: 4
‘‘Sec. 530A. HOPE Accounts.’’.
(b) EXCESSCONTRIBUTIONS.— 5
(1) I
N GENERAL.—Section 4973(a) of such 6
Code is amended by striking ‘‘or’’ at the end of 7
paragraph (5), by striking the period at the end of 8
paragraph (6) and inserting ‘‘, and’’, and by insert-9
ing after paragraph (6) (as so amended) the fol-10
lowing new paragraph: 11
‘‘(7) A HOPE Account (as defined in section 12
530A(b)).’’. 13
(2) E
XCESS CONTRIBUTIONS DEFINED .—Sec-14
tion 4973 of such Code is amended by adding at the 15
end the following new subsection: 16
‘‘(i) E
XCESSCONTRIBUTIONS TO HOPE AC-17
COUNT.— 18
‘‘(1) I
N GENERAL.—For purposes of this sec-19
tion, in the case of HOPE Accounts (within the 20
meaning of section 530A(b)), the term ‘‘excess con-21
tributions’’ means the sum of— 22
‘‘(A) The aggregate amount contributed 23
for the taxable year to the accounts (other than 24
a rollover contribution described in section 25
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530A(d)(4)) which exceeds the contributions 1
limits under section 530A(c), and 2
‘‘(B) the amount determined under this 3
subsection for the preceding taxable year, re-4
duced by the sum of— 5
‘‘(i) the distributions out of the ac-6
counts which were included in gross in-7
come under section 530A(d)(2)(C), and 8
‘‘(ii) the excess (if any) of— 9
‘‘(I) the maximum amount of al-10
lowable contributions under 530A(c) 11
for the taxable year, over 12
‘‘(II) the amount contributed to 13
the accounts for the taxable year. 14
‘‘(2) R
ETURNED EXCESS CONTRIBUTIONS .—For 15
purposes of this subsection, any contribution which 16
is distributed out of the HOPE Account in a dis-17
tribution to which section 530A(d)(2)(C) applies 18
shall be treated as an amount not contributed.’’. 19
(c) E
MPLOYERCONTRIBUTIONS.— 20
(1) I
N GENERAL.—Section 106 of such Code is 21
amended by adding at the end the following new 22
subsection: 23
‘‘(h) C
ONTRIBUTIONS TOHOPE ACCOUNTS.— 24
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‘‘(1) IN GENERAL.—In the case of an employee 1
who is an eligible individual, amounts contributed by 2
such employee’s employer to any HOPE account (as 3
defined in section 530A(b)) of such employee shall 4
be treated as employer-provided coverage for medical 5
expenses under an accident or health plan to the ex-6
tent such amounts do not exceed the limitations ap-7
plicable to such individual for such taxable year 8
under section 530A(c) (determined without regard to 9
this subsection). 10
‘‘(2) L
IMITATION.—Paragraph (1) shall not 11
apply in the case of a taxpayer whose adjusted gross 12
income for the taxable year exceeds $100,000 13
($200,000 in the case of a joint return). 14
‘‘(3) S
PECIAL RULES.—Rules similar to the 15
rules of paragraphs (2), (3), (4), and (5) of sub-16
section (b) shall apply for purposes of this sub-17
section. 18
‘‘(4) C
ROSS REFERENCE.—For penalty on fail-19
ure by employer to make comparable contributions 20
to the health savings accounts of comparable em-21
ployees, see section 4980G.’’. 22
(2) I
NFORMATION REPORTING FOR EMPLOY -23
EES.—Section 6051(a) is amended by striking 24
‘‘and’’ at the end of paragraph (16), by striking the 25
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period at the end of paragraph (17) and inserting ‘‘, 1
and’’, and by inserting after paragraph (17) (as so 2
amended) the following new paragraph: 3
‘‘(18) the amount contributed to any HOPE 4
Account (as defined in section 530A(b)) of such em-5
ployee.’’. 6
(3) C
ONFORMING AMENDMENT RELATING TO 7
CAFETERIA PLANS.—Section 125(f)(1) of such Code 8
is amended by inserting ‘‘106(h),’’ after ‘‘106(b),’’. 9
(d) F
AILURE OFEMPLOYERTOMAKECOMPARABLE 10
HOPE A
CCOUNTCONTRIBUTIONS.— 11
(1) I
N GENERAL.—Section 4980G(a) of such 12
Code is amended by inserting ‘‘or HOPE Account’’ 13
after ‘‘health savings account’’. 14
(2) C
ONFORMING AMENDMENTS .— 15
(A) Section 4980G(c) of such Code is 16
amended by striking ‘‘and health savings ac-17
counts’’ and inserting ‘‘, health savings ac-18
counts, or HOPE Accounts’’. 19
(B) Section 4980G(d) of such Code is 20
amended by inserting ‘‘or HOPE Account’’ 21
after ‘‘health savings account’’. 22
(C) The heading for section 4980G of such 23
Code is amended by inserting ‘‘
OR HOPE AC -24
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•HR 955 IH
COUNT’’ after ‘‘HEALTH SAVINGS AC -1
COUNT’’. 2
(D) The table of sections for chapter 43 of 3
such Code is amended by striking the item re-4
lating to section 4980G and inserting the fol-5
lowing new item: 6
‘‘Sec. 4980G. Failure of employer to make comparable health savings account
or HOPE Account contributions.’’.
(e) APPLICATION OF PROHIBITEDTRANSACTION 7
R
ULES.— 8
(1) I
N GENERAL.—Section 4975(e)(1) of such 9
Code is amended by striking ‘‘or’’ at the end of sub-10
paragraph (F), by redesignating subparagraph (G) 11
as subparagraph (H), and by inserting after sub-12
paragraph (F), as so amended, the following new 13
subparagraph: 14
‘‘(G) a HOPE Account described in section 15
530A(b), or’’. 16
(f) F
AILURETOREPORT.—Section 6693(a)(2) of 17
such Code is amended by striking ‘‘and’’ at the end of 18
subparagraph (E), by striking the period at the end of 19
subparagraph (F) and inserting ‘‘, and’’, and by inserting 20
after subparagraph (F) (as so amended) the following new 21
subparagraph: 22
‘‘(G) Section 530A(e) (relating to HOPE 23
Accounts).’’. 24
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•HR 955 IH
(g) EFFECTIVEDATE.—The amendments made by 1
this section shall apply to taxable years beginning after 2
December 31, 2025. 3
Æ
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