109 HR 4511 IH: Flex Health Savings Accounts Act of 2005 U.S. House of Representatives 2005-12-13 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 109th CONGRESS 1st Session H. R. 4511 IN THE HOUSE OF REPRESENTATIVES December 13, 2005 Mr. Cantor (for himself and Mr. Burgess) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to allow the use of flexible spending and health reimbursement arrangements in combination with health savings accounts, and for other purposes.

1.

Short title

This Act may be cited as the Flex Health Savings Accounts Act of 2005.

2.

Health reimbursement arrangements and spending arrangements in combination with Health Savings Accounts

(a)

In general

Subparagraph (B) of section 223(c)(1) of the Internal Revenue Code of 1986 (relating to certain coverage disregarded) is amended by striking and at the end of clause (i), by striking the period at the end of clause (ii) and inserting , and, and by inserting after clause (ii) the following new clause: (iii)coverage under a flexible spending arrangement or a health reimbursement arrangement, or both, which meets the requirements of paragraph (6).. (b)

Combination health reimbursement, savings, and spending arrangements

Subsection (c) of section 223 of such Code (relating to definitions and special rules) is amended by adding at the end the following new paragraph: (6)

Combined limit for contributions or credits to health reimbursement, arrangements and spending arrangements

(A)

In general

In the case of coverage under a flexible spending arrangement or a health reimbursement arrangement, or both, such coverage meets the requirements of this paragraph if the amount determined under subparagraph (B) for a taxable year does not exceed the amounts specified under paragraph (2)(A)(ii), reduced by the maximum amount available under subsection (b)(2)(A) or (B), whichever are applicable. (B)

Amount

For purposes of subparagraph (A), the amount determined under this subparagraph for a taxable year is the sum of— (i)the salary reduction amount elected by the individual and, if applicable, the employer contribution or credit allocated to the individual for the taxable year under the flexible spending arrangement (as defined in section 106(c)(2)), plus (ii)the amounts that the individual is permitted, under the terms of the plan, to receive in reimbursements for the taxable year under the health reimbursement arrangement. (C)

Exceptions for disregarded coverage

For purposes of subparagraph (A)— (i)

Certain flexible spending arrangements

Any flexible spending arrangement salary reduction amounts or employer contributions or credits that are restricted by the employer to use for coverage described in paragraph (1)(B) shall not be taken into account under subparagraph (B). (ii)

Certain health reimbursement arrangements

Any reimbursements from a health reimbursement arrangement for coverage described in paragraph (1)(B) shall not be taken into account under subparagraph (B). . (c)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2005.

3.

Increase in monthly limitations for contributions to Health Savings Accounts

(a)

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

The monthly limitation for any month is 1/12 of— (A)in the case of an eligible individual who has self-only coverage under a high deductible health plan as of the first day of such month, $2,250, and (B)in the case of an eligible individual who has family coverage under a high deductible health plan as of the first day of such month, $4,500.. (b)

Effective date

The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2005.