109th CONGRESS
1st Session
H. R. 4511
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.
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.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Flex Health Savings Accounts Act of 2005'.
SEC. 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.
SEC. 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.
END
