1.
(a)This Act may be cited
as the Health Savings Account
Expansion Act of 2009
.
(b)The table of contents for this Act is as follows:
Sec. 1. Short title, etc.
Title I—Expansion of health savings accounts
Sec. 101. Repeal of high deductible health plan
requirement.
Sec. 102. Health insurance may be purchased from
account.
Sec. 103. Increase in dollar limitation.
Sec. 104. Effective date.
Title II—Termination of existing health-related tax preferences
for medical coverage, medical care, etc
Sec. 201. Termination of existing health-related tax
preferences for medical coverage, medical care, etc.
Sec. 202. Termination of employer deduction for health
coverage.
<enum>I</enum><header>Expansion of
health savings accounts</header>
<section id="H74519CB530334D4D9844E054899395F3"><enum>101.</enum><header>Repeal of high
deductible health plan requirement</header>
<subsection id="HF3A5C0E281B44B2E9FC8EAC9E800DDBF"><enum>(a)</enum><header>In
general</header><text>Section 223 of the Internal Revenue Code of 1986 is
amended by striking subsection (c) and redesignating subsections (d) through
(h) as subsections (c) through (g), respectively.</text>
</subsection><subsection id="H984F89D15F4A4D7EB24AE8FC2F803D99"><enum>(b)</enum><header>Conforming
amendments</header>
<paragraph id="H860741FC24CE46E694015240B0DB449E"><enum>(1)</enum><text>Subsection (a) of
section 223 of such Code is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HA3F7F7C6E937492DBFC5E9D1BFE6BFEF" style="OLC">
<subsection id="H3972302A7F634C09AE6578C4C5CF60D6"><enum>(a)</enum><header>Deduction
allowed</header><text>In the case of an individual, there shall be allowed as a
deduction for a taxable year an amount equal to the aggregate amount paid in
cash during such taxable year by or on behalf of such individual to a health
savings account of such
individual.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H7B18E277E6AA4E26A9C92D84AA175A56"><enum>(2)</enum><text>Subsection (b) of
section 223 of such Code is amended by striking paragraph (8).</text>
</paragraph><paragraph id="HA2749A610C1D4999B1F8D3BF096EF5C1"><enum>(3)</enum><text>Subparagraph (A)
of section 223(c)(1) of the Internal Revenue Code of 1986 (as redesignated by
subsection (a)) is amended—</text>
<subparagraph id="H8921F7428D9E41C992CC3BB5F564945B"><enum>(A)</enum><text>by striking
<quote>subsection (f)(5)</quote> and inserting <quote>subsection
(e)(5)</quote>, and</text>
</subparagraph><subparagraph id="H94D738DAB8B647CF9F59C7BB60635256"><enum>(B)</enum><text>in clause
(ii)—</text>
<clause id="H626BE0FDDE9845008EE98200DBBBDF13"><enum>(i)</enum><text>by
striking <quote>the sum of—</quote> and all that follows and inserting
<quote>the dollar amount in effect under subsection (b)(1).</quote>.</text>
</clause></subparagraph></paragraph><paragraph id="H744E539F01DC4217B460D5DFD987DCD4"><enum>(4)</enum><text>Section 223(f)(1)
of such Code (as redesignated by subsection (a)) is amended by striking
<quote>Each dollar amount in subsections (b)(2) and (c)(2)(A)</quote> and
inserting <quote>In the case of a taxable year beginning after December 31,
2010, each dollar amount in subsection (b)(1)</quote>.</text>
</paragraph><paragraph id="H0EFA8AE146D54A98B11784AA692E1186"><enum>(5)</enum><text>Section 26(b)(U)
of such Code is amended by striking <quote>section 223(f)(4)</quote> and
inserting <quote>section 223(e)(4)</quote>.</text>
</paragraph><paragraph id="H090019EEACCC4DD993603E07BB2B9208"><enum>(6)</enum><text>Sections 35(g)(3),
220(f)(5)(A), 848(e)(1)(v), 4973(a)(5), and 6051(a)(12) of such Code are each
amended by striking <quote>section 223(d)</quote> each place it appears and
inserting <quote>section 223(c)</quote>.</text>
</paragraph><paragraph id="H8611C6BCEBEF4E5E848EBEFC1BABB88A"><enum>(7)</enum><text>Section 106(d)(1)
of such Code is amended—</text>
<subparagraph id="HE49BB4750DAC4C05B243E57B34FBCCF5"><enum>(A)</enum><text>by striking
<quote>who is an eligible individual (as defined in section 223(c)(1))</quote>,
and</text>
</subparagraph><subparagraph id="H7BFCAB8E8F1B42F485F8B7EE4E9A0A82"><enum>(B)</enum><text>by striking
<quote>section 223(d)</quote> and inserting <quote>section
223(c)</quote>.</text>
</subparagraph></paragraph><paragraph commented="no" id="H5DD75BD74BDA4012AE8723A27B58D8FE"><enum>(8)</enum><text>Section 408(d)(9)
of such Code is amended—</text>
<subparagraph commented="no" id="H57EFB29853A647158CD703B950D4B41A"><enum>(A)</enum><text>in subparagraph
(A) by striking <quote>who is an eligible individual (as defined in section
223(c)) and</quote>, and</text>
</subparagraph><subparagraph commented="no" id="HB6A79C64D0194DF5AB1B571DD8B1C61D"><enum>(B)</enum><text>in subparagraph
(C) by striking <quote>computed on the basis of the type of coverage under the
high deductible health plan covering the individual at the time of the
qualified HSA funding distribution</quote>.</text>
</subparagraph></paragraph><paragraph commented="no" id="H165771812D324B2EBB23886A1A092ED1"><enum>(9)</enum><text>Section 877A(g)(6)
of such Code is amended by striking <quote>223(f)(4)</quote> and inserting
<quote>223(e)(4)</quote>.</text>
</paragraph><paragraph id="H192DF3C26B374DD5B963972A94B3019A"><enum>(10)</enum><text>Section 4973(g)
of such Code is amended—</text>
<subparagraph id="H1265031C26A84A11BE29A72595B1E9C9"><enum>(A)</enum><text>by striking
<quote>section 223(d)</quote> and inserting <quote>section
223(c)</quote>,</text>
</subparagraph><subparagraph id="H4FA46A1D3EA74D1A89146D55C2B92E34"><enum>(B)</enum><text>in paragraph (2),
by striking <quote>section 223(f)(2)</quote> and inserting <quote>section
223(e)(2)</quote>, and</text>
</subparagraph><subparagraph id="H70FEAC34974E4241A71552B62F02D8CD"><enum>(C)</enum><text>by striking
<quote>section 223(f)(3)</quote> and inserting <quote>section
223(e)(3)</quote>.</text>
</subparagraph></paragraph><paragraph id="HD86392D0811F495ABEF43FD953E58088"><enum>(11)</enum><text>Section 4975 of
such Code is amended—</text>
<subparagraph id="HAA1CBD3C88A54AB6825F955D48D356F9"><enum>(A)</enum><text>in subsection
(c)(6)—</text>
<clause id="HD035C6679C6B486BADA6B875593DB847"><enum>(i)</enum><text>by
striking <quote>section 223(d)</quote> and inserting <quote>section
223(c)</quote>, and</text>
</clause><clause id="HB95CA065960345BCBD4A18E47B166DF6"><enum>(ii)</enum><text>by
striking <quote>section 223(e)(2)</quote> and inserting <quote>section
223(d)(2)</quote>, and</text>
</clause></subparagraph><subparagraph id="H02479E5EF85E41A3B6DA780ACC350563"><enum>(B)</enum><text>in subsection
(e)(1)(E), by striking <quote>section 223(d)</quote> and inserting
<quote>section 223(c)</quote>.</text>
</subparagraph></paragraph><paragraph id="HE1E0060E415E4CFCAF3AACA267016053"><enum>(12)</enum><text>Section
6693(a)(2)(C) of such Code is amended by striking <quote>section 223(h)</quote>
and inserting <quote>section 223(g)</quote>.</text>
</paragraph></subsection></section><section id="HCF3528F00C5C408DA58672F3CF0B4FC1"><enum>102.</enum><header>Health
insurance may be purchased from account</header><text display-inline="no-display-inline">Paragraph (2) of section 223(d) of the
Internal Revenue Code of 1986 is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H08B0A2EE327A49C3B090C8C69561EF23" style="OLC">
<paragraph id="HD97459EFF5924ADEB1926387B07A4FAC"><enum>(2)</enum><header>Qualified
medical expenses</header><text display-inline="yes-display-inline">The term
<term>qualified medical expenses</term> means, with respect to an account
beneficiary, amounts paid by such beneficiary for medical care (as defined in
section 213(d)) for such individual, the spouse of such individual, and any
dependent (as defined in section 152, determined without regard to subsections
(b)(1), (b)(2), and (d)(1)(B) thereof) of such individual, but only to the
extent such amounts are not compensated for by insurance or
otherwise.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="H960D256B10D644BB853F7C3AA983E35F"><enum>103.</enum><header>Increase in
dollar limitation</header>
<subsection id="H34B539003BDF4AF097BA0B50EF6A3B05"><enum>(a)</enum><header>In
general</header><text>Paragraph (1) of section 223(b) of the Internal Revenue
Code of 1986 is amended by striking <quote>the sum of the monthly</quote> and
all that follows through <quote>eligible individual</quote> and inserting
<quote>$8,000 ($16,000 in the case of a joint return)</quote>.</text>
</subsection><subsection id="H1370283E7BE34718954C92EFC7FB6ED8"><enum>(b)</enum><header>Conforming
amendments</header>
<paragraph id="H87BB4CE70DD84A2EBC3F2D84FA57A5BA"><enum>(1)</enum><text>Subsection (b) of
such Code is amended by striking paragraphs (2), (3), and (5) and by
redesignating paragraphs (4), (6), and (7) as paragraphs (2), (3), and (4),
respectively.</text>
</paragraph><paragraph id="H7BC66E09E5E34A889ECF347F82FA1442"><enum>(2)</enum><text>Paragraph (2) of
section 223(b) of such Code (as redesignated by paragraph (1)) is amended by
striking the last sentence.</text>
</paragraph><paragraph id="HE6DB37D6B2CA4710BD0C03DEB414B335"><enum>(3)</enum><text>Paragraph (4) of
section 223(b) of such Code (as redesignated by paragraph (1)) is amended to
read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HB06C408B437F4BEA9DC4386C8B009CA6" style="OLC">
<paragraph id="HA96F51E206104449905E5B2478FB6F8B"><enum>(4)</enum><header>Medicare
eligible individuals</header><text display-inline="yes-display-inline">The
limitation under this subsection for any taxable year with respect to an
individual shall—</text>
<subparagraph id="H0F562CC6E39D4057BB821795C2260D83"><enum>(A)</enum><text>in the case of the
first taxable year in which such individual is entitled to benefits under title
XVIII of the Social Security Act, be the amount which bears the same proportion
to the amount in effect under paragraph (1) with respect to such individual
as—</text>
<clause id="HB55DFCE8B9B24100BCECD0662EF30BEE"><enum>(i)</enum><text>the number of
months in the taxable year during which such individual was not so entitled,
bears</text>
</clause><clause id="H1BC91EA271D24F2E825E385F7A89A1E7"><enum>(ii)</enum><text>to 12, and</text>
</clause></subparagraph><subparagraph id="H0E8B52EFAE4A495FB40F49E16E63C2D8"><enum>(B)</enum><text>be zero for any
taxable year
thereafter.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H55B659D004ED4BE183397127CB05500C"><enum>(4)</enum><text>Subparagraph (B)
of section 223(f)(1) of such Code (as redesignated by section 101) is amended
to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H095E8E9D894F4D0CADDC760B96165DE5" style="OLC">
<subparagraph id="H9A554EF97B9D498FA177E7D57ED0CABA"><enum>(B)</enum><text display-inline="yes-display-inline">the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which such taxable year begins
determined by substituting <quote>calendar year 2009</quote> for
<quote>calendar year
1992</quote>.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection></section><section id="H8E61CF9894184C6496ED03E1DEB6227D"><enum>104.</enum><header>Effective
date</header><text display-inline="no-display-inline">The amendments made by
this title shall apply to taxable years beginning after the date of the
enactment of this Act.</text>
</section><enum>II</enum><header>Termination of
existing health-related tax preferences for medical coverage, medical care,
etc</header>
<section id="H5FAABE71DDE24FAF8B3D7F5A55AEA108"><enum>201.</enum><header>Termination of
existing health-related tax preferences for medical coverage, medical care,
etc</header>
<subsection id="HC50C56FC6B5C43E09B4E468327A58582"><enum>(a)</enum><header>Amounts received
under accident and health plans</header><text display-inline="yes-display-inline">Section 105 of the Internal Revenue Code of
1986 is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="HBBA56BB25E0C47B592191F7269E7A099" style="OLC">
<subsection id="H09636CE3772B43F781EC59C38AAF9B4B"><enum>(k)</enum><header>Termination</header><text display-inline="yes-display-inline">This section shall not apply to taxable
years beginning after December 31,
2009.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H752D61F63CE1453986634FC51E122135"><enum>(b)</enum><header>Contributions by
employer to accident and health plans</header>
<paragraph id="HCD5FF2D6FBAD459D8B23DD51998CF901"><enum>(1)</enum><header>In
general</header><text>Section 106 of such Code is amended by adding at the end
the following:</text>
<quoted-block display-inline="no-display-inline" id="H9B33E2DB4532407888F0BB4D5851BF77" style="OLC">
<subsection id="HE1FEE688E41540E5A9105386384BAD52"><enum>(f)</enum><header>Termination</header><text display-inline="yes-display-inline">This section shall not apply to taxable
years beginning after December 31,
2009.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H9B1BD72A75DB4ED082FF4A56FF097A38"><enum>(2)</enum><header>Conforming
amendment</header><text>Subparagraph (B) of section 223(b)(2) of such Code, as
amended by section 103 of this Act, is amended by striking <quote>which is
excludable from the taxpayer’s gross income for such taxable year under section
106(d)</quote> and inserting <quote>which would have been excludable from the
taxpayer’s gross income for such taxable year under section 106(d) (determined
as if such section was in effect on the day before the date of enactment of the
<short-title>Health Savings Account Expansion Act of
2009</short-title>)</quote>.</text>
</paragraph></subsection><subsection id="H64D16EEDF06A4F1C8E5E6482D0FA6827"><enum>(c)</enum><header>Special rules
for health insurance costs of self-Employed individuals</header><text>Paragraph
(1) of section 162(l) of such Code is amended by adding at the end the
following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H1B1BE595B3A64FE39A9230E911AB0447" style="OLC">
<subparagraph id="H3D8BF16FE39C4E8EADDAC47F53F9EA98"><enum>(C)</enum><header>Years after
2009</header><text display-inline="yes-display-inline">In the case of any
taxable year beginning in a calendar year after 2009, the applicable percentage
shall be
zero.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HE712771E96854D66AD0603D44F217A14"><enum>(d)</enum><header>Medical, dental,
etc., expenses</header><text>Section 213 of such Code is amended by adding at
the end the following:</text>
<quoted-block display-inline="no-display-inline" id="HCC37BFEF35BC4AE195312B6CC996112A" style="OLC">
<subsection id="HEACC102679EF47CFA11035AA195AF1AA"><enum>(f)</enum><header>Termination</header><text display-inline="yes-display-inline">This section shall not apply to taxable
years beginning after December 31,
2009.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H14D609A454994AFA99459A5ECB7B7E99"><enum>(e)</enum><header>Effective
date</header><text>The amendments made by this section shall take effect on the
date of the enactment of this Act.</text>
</subsection></section><section id="HB6C34819D81F4EB781E0ED75D0B2E7C4"><enum>202.</enum><header>Termination of
employer deduction for health coverage</header>
<subsection id="HA3341AC77B3D415A8387057289F9C7E2"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 162 of the
Internal Revenue Code of 1986 is amended by redesignating subsection (q) as
subsection (r) and by inserting after subsection (p) the following new
subsection:</text>
<quoted-block display-inline="no-display-inline" id="HE6D1D8DEFE934A29B4B29E5B1A573A84" style="OLC">
<subsection id="H6C94EA5A70BB4BDC8ACE5E53B55EE903"><enum>(q)</enum><header>Denial of
deduction for medical care</header><text display-inline="yes-display-inline">No
deduction shall be allowed under this chapter to an employer for any amount
paid or incurred with respect to an employee, his spouse, and dependents during
the taxable year—</text>
<paragraph id="H6608E7F7429C48D9BBDC6F0658461DD0"><enum>(1)</enum><text>for insurance
which constitutes medical care,</text>
</paragraph><paragraph id="H946BC422C35C427088CCEC7DBEF08228"><enum>(2)</enum><text>under a health
flexible spending arrangement or health reimbursement arrangement,</text>
</paragraph><paragraph id="H31E991D4DA1041A9A69D12E94B709709"><enum>(3)</enum><text>to an Archer MSA
or a health savings account, or</text>
</paragraph><paragraph id="H7299DC0EF8E74DF58DBB821D2101C13A"><enum>(4)</enum><text>under any other
arrangement under which the employer provides medical care, directly or
indirectly, to the employee, spouse, or
dependent.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H620F7267D9C44011AEF117F42E88547E"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by subsection (a) shall apply to taxable
years beginning after December 31, 2009.</text>
</subsection></section>