H.R. 5445 would amend the Internal Revenue code to modify the rules regarding contributions to and treatment of distributions from Health Savings Accounts (HSAs), which are tax-favored accounts that individuals with high-deductible health plans can use to fund certain health expenses. The bill would raise the maximum basic contribution limit to an HSA to equal the sum of the annual deductible and out-of-pocket expenses permitted under a high deductible health plan—almost doubling the limit allowed under current law. Also, under current law, spouses must allocate the entire amount of their catch-up contributions to their own HSA, but the bill would allow spouses to divide up their combined catch-up contributions between both of their HSAs. Lastly, under current law, distributions from HSAs for qualified medical expenses are only excluded from gross income if the expense was incurred after the establishment of the HSA. The bill would allow distributions to be excluded from gross income if the associated medical expenses were incurred within a 60-day period between the individual gaining coverage under a high deductible plan and establishing the HSA.
The staff of the Joint Committee on Taxation (JCT) estimates that enacting H.R. 5445 would reduce revenues by about $20.5 billion over the 2017-2026 period. Of that reduction, about $4.8 billion would result from changes in off-budget revenues (from Social Security payroll taxes).
The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting revenues or direct spending. The net changes in revenues that are subject to those pay-as-you-go procedures are shown in the following table. Only on-budget changes to revenues and direct spending are subject to pay-as-you-go procedures.
