HR 74
Freedom for Families Act
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Bill overview
The Freedom for Families Act expands access to health savings accounts (HSAs) by removing the requirement that individuals be enrolled in a high-deductible health plan to establish one. It increases the annual contribution limits to $9,000 for individuals and $18,000 for joint filers, and allows tax-free distributions from HSAs during periods of qualified caregiving, such as family leave or caring for a sick family member. This bill aims to provide greater financial flexibility for individuals managing family and medical needs.
Key provisions
- Allows individuals to establish HSAs without a high-deductible health plan.
- Increases HSA contribution limits to $9,000 for individuals and $18,000 for joint filers.
- Permits tax-free HSA distributions during periods of qualified caregiving.
- Defines ‘period of qualified caregiving’ to include situations like parental leave, foster care, and caring for a family member with a serious health condition.
- Excludes HSA distributions during qualified caregiving from gross income.
- Amends the Internal Revenue Code to align with the Family and Medical Leave Act's definitions of leave.
- Removes the requirement that HSA contributions be limited to those enrolled in a high-deductible health plan.
- Conforms existing HSA regulations to reflect these changes.
Who is affected
- Individuals and families
- Healthcare consumers
- Taxpayers
- Families with young children
- Caregivers
Notable changes
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119th CONGRESS — 1st Session
H. R. 74
IN THE HOUSE OF REPRESENTATIVES
A BILL
To amend the Internal Revenue Code of 1986 to allow for tax-advantaged distributions from health savings accounts during family or medical leave, and for other purposes.
This Act may be cited as the Freedom for Families Act
.
used exclusively to pay qualified medical expenses of any account beneficiary, or
or the expenses incurred during a period of qualified caregiving of the account beneficiaryafter
paying the qualified medical expenses of the account beneficiary.
Section 223(f)(4) of such Code is amended in the heading by striking distributions not used for qualified medical expenses
and inserting certain distributions
.
The amendments made by this section shall apply with respect to taxable years beginning after the date of the enactment of this Act.
who is an eligible individual for any month during the taxable year.
Section 223(b)(1) of the Internal Revenue Code of 1986 is amended by striking the sum of the monthly
and all that follows through eligible individual
and inserting $9,000 (twice such amount in the case of a joint return)
.
Section 223(b) of such Code is amended by striking paragraphs (2), (3), and (5) and by redesignating paragraphs (4) and (6) as paragraphs (2) and (3), respectively.
Section 223(b)(2) of such Code (as redesignated by subparagraph (A)) is amended by striking the last sentence.
Section 223(d)(1)(A)(ii) is amended by striking the sum of
and all that follows through the period at the end and inserting the dollar amount in effect under subsection (b)(1).
.
Section 223(g)(1) of such Code is amended—
by striking Each dollar amount in subsections (b)(2) and (c)(2)(A)
and inserting The dollar amount in subsection (b)(1)
;
by striking thereof
and all that follows through
and inserting calendar year 2003
.
; andcalendar year 1997
.
under subsections (b)(2) and (c)(2)(A)and inserting
under subsection (b)(1).
The amendments made by this section shall apply with respect to months in taxable years beginning after the date of the enactment of this Act.