Sec. 1311. Termination of deduction and exclusions for contributions to medical savings accounts

832 words·~4 min read·/bill/115/hr/1/rh/section-1311

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Section 220 is amended by adding at the end the following new subsection: No deduction shall be allowed under subsection

(a)with respect to any taxable year beginning after December 31, 2017. . Section 106 is amended by striking subsection (b). Section 62(a) is amended by striking paragraph (16). Section 106(d) is amended by striking paragraph (2), by redesignating paragraph

(3)as paragraph (6), and by inserting after paragraph

(1)the following new paragraphs: No amount shall be included in the gross income of any employee solely because the employee may choose between the contributions referred to in paragraph

(1)and employer contributions to another health plan of the employer. Any employer contribution to a health savings account (as so defined), if otherwise allowable as a deduction under this chapter, shall be allowed only for the taxable year in which paid. Every individual required to file a return under section 6012 for the taxable year shall include on such return the aggregate amount contributed by employers to the health savings accounts (as so defined) of such individual or such individual’s spouse for such taxable year. Paragraph

(1)shall not apply for purposes of section 4980B. . Section 223(b)(4) is amended by striking subparagraph (A), by redesignating subparagraphs

(B)and

(C)as subparagraphs

(A)and (B), respectively, and by striking the second sentence thereof. Section 223(b)(5) is amended by striking under paragraph (3)) and all that follows through shall be divided equally between them and inserting the following: under paragraph (3)) shall be divided equally between the spouses . Section 223(c) is amended by striking paragraph (5). Section 3231(e) is amended by striking paragraph (10). Section 3306(b) is amended by striking paragraph (17). Section 3401(a) is amended by striking paragraph (21). Chapter 43 is amended by striking section 4980E (and by striking the item relating to such section in the table of sections for such chapter). Section 4980G is amended to read as follows: In the case of an employer who makes a contribution to the health savings account of any employee during a calendar year, there is hereby imposed a tax on the failure of such employer to meet the requirements of subsection

(d)for such calendar year. The amount of the tax imposed by subsection

(a)on any failure for any calendar year is the amount equal to 35 percent of the aggregate amount contributed by the employer to health savings accounts of employees for taxable years of such employees ending with or within such calendar year. In the case of a failure which is due to reasonable cause and not to willful neglect, the Secretary may waive part or all of the tax imposed by subsection

(a)to the extent that the payment of such tax would be excessive relative to the failure involved. An employer meets the requirements of this subsection for any calendar year if the employer makes available comparable contributions to the health savings accounts of all comparable participating employees for each coverage period during such calendar year. For purposes of paragraph (1), the term comparable contributions means contributions— which are the same amount, or which are the same percentage of the annual deductible limit under the high deductible health plan covering the employees. In the case of an employee who is employed by the employer for only a portion of the calendar year, a contribution to the health savings account of such employee shall be treated as comparable if it is an amount which bears the same ratio to the comparable amount (determined without regard to this subparagraph) as such portion bears to the entire calendar year. For purposes of paragraph (1), the term comparable participating employees means all employees— who are eligible individuals covered under any high deductible health plan of the employer, and who have the same category of coverage. For purposes of subparagraph (B), the categories of coverage are self-only and family coverage. Paragraph

(3)shall be applied separately with respect to part-time employees and other employees. For purposes of subparagraph (A), the term part-time employee means any employee who is customarily employed for fewer than 30 hours per week. For purposes of applying this section to a contribution to a health savings account of an employee who is not a highly compensated employee (as defined in section 414(q)), highly compensated employees shall not be treated as comparable participating employees. For purposes of this section, all persons treated as a single employer under subsection (b), (c), (m), or

(o)of section 414 shall be treated as 1 employer. Terms used in this section which are also used in section 223 have the respective meanings given such terms in section 223. The Secretary shall issue regulations to carry out the purposes of this section. . Section 6051(a) is amended by striking paragraph (11). Section 6051(a)(14)(A) is amended by striking paragraphs

(11)and

(12)and inserting paragraph

(12). The amendment made by this section shall apply to taxable years beginning after December 31, 2017.