Flex Health Savings Accounts Act of 2005

Flex Health Savings Accounts Act of 2005 - Amends the Internal Revenue Code to: (1) allow individuals covered under a flexible spending arrangement or health reimbursement arrangement to qualify for the tax deduction for contributions to health savings accounts; and (2) increase the monthly limitation on contributions to health savings accounts.

[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4511 Introduced in House (IH)]







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.
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