[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 2424 Introduced in Senate (IS)]
109th CONGRESS
2d Session
S. 2424
To amend the Internal Revenue Code of 1986 to increase the contribution
limits for health savings accounts, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 15, 2006
Mr. Allen introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to increase the contribution
limits for health savings accounts, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. INCREASE IN CONTRIBUTION LIMITS FOR HEALTH SAVINGS ACCOUNTS.
(a) Increase in Monthly Limit.--
(1) In general.--Paragraph (2) of section 223(b) of the
Internal Revenue Code of 1986 (relating to monthly limitation)
is amended to read as follows:
``(2) Monthly limitation.--
``(A) In general.--In the case of an eligible
individual who has coverage under a high deductible
health plan, the monthly limitation for any month of
such coverage is \1/12 \of the lesser of--
``(i) the sum of the annual deductible and
the other annual out-of-pocket expenses (other
than for premiums) required to be paid under
the plan by the eligible individual for covered
benefits, or
``(ii) in the case of an eligible
individual with--
``(I) self-only coverage, the
dollar amount in effect under subclause
(I) of subsection (c)(2)(A)(ii), or
``(II) family coverage, the dollar
amount in effect under subclause (II)
of subsection (c)(2)(A)(ii).
``(B) Special rules relating to out-of-pocket
expenses.--
``(i) Reduction for separate plan.--The
annual out-of-pocket expenses taken into
account under subparagraph (A)(i) with respect
to any eligible individual shall be reduced by
any out-of-pocket expense payable under a
separate plan covering the individual.
``(ii) Secretarial authority.--The
Secretary may by regulations provide that
annual out-of-pocket expenses will not be taken
into account under subparagraph (A)(i) to the
extent that there is only a remote likelihood
that such amounts will be required to be
paid.''
(2) Conforming amendments.--
(A) Section 223(b)(3)(A) of such Code is amended by
striking ``subparagraphs (A) and (B) of''.
(B) Section 223(d)(1)(A)(ii)(I) of such Code is
amended by striking ``subsection (b)(2)(B)(ii)'' and
inserting ``subsection (c)(2)(A)(ii)(II)''.
(C) Section 223(c)(2)(D)(ii) of such Code is
amended to read as follows:
``(ii) Certain items disregarded in
computing monthly limitation.--Such plan's
annual deductible, and such plan's annual out-
of-pocket limitation, for services provided
outside of such network shall not be taken into
account for purposes of subsection (b)(2).''.
(b) Application of Special Rules for Married Individuals.--
Paragraph (5) of section 223(b) of the Internal Revenue Code of 1986
(relating to special rule for married individuals) is amended to read
as follows:
``(5) Special rules for married individuals.--
``(A) In general.--In the case of individuals who
are married to each other and who are both eligible
individuals, the limitation under paragraph (1) for
each spouse shall be equal to the spouse's applicable
share of the combined marital limit.
``(B) Combined marital limit.--For purposes of
subparagraph (A), the combined marital limit is the
excess (if any) of--
``(i) the lesser of--
``(I) subject to subparagraph (C),
the sum of the limitations computed
separately under paragraph (1) for each
spouse (including any additional
contribution amount under paragraph
(3)), or
``(II) the dollar amount in effect
under subsection (c)(2)(A)(ii)(II),
over
``(ii) the aggregate amount paid to Archer
MSAs of such spouses for the taxable year.
``(C) Special rule where both spouses have family
coverage under same plan.--For purposes of subparagraph
(B)(i)(I), if either spouse has family coverage which
covers both spouses, both spouses shall be treated as
having only such coverage (and if both spouses each
have such coverage under different plans, shall be
treated as having only family coverage with the plan
with respect to which the lowest amount is determined
under paragraph (2)(A)(i)).
``(D) Applicable share.--For purposes of
subparagraph (A), a spouse's applicable share is one-
half of the combined marital limit unless both spouses
agree on a different division.
``(E) Couples not married entire year.--The
Secretary shall prescribe rules for the application of
this paragraph in the case of any taxable year for
which the individuals were not married to each other
during all months included in the taxable year,
including rules which allow individuals in appropriate
cases to take into account coverage prior to marriage
in computing the combined marital limit for purposes of
this paragraph.''.
(c) Self-Only Coverage.--Section 223(c)(4) of the Internal Revenue
Code of 1986 (defining family coverage) is amended to read as follows:
``(4) Coverage.--
``(A) Family coverage.--The term `family coverage'
means any coverage other than self-only coverage.
``(B) Self-only coverage.--If more than 1
individual is covered by a high deductible health plan
but only 1 of the individuals is an eligible
individual, the coverage shall be treated as self-only
coverage.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2006.
<all>