“To amend the Internal Revenue Code of 1986 to reform health provisions, and for other purposes.”
No CRS summary available for this bill.
This section establishes HOPE Accounts as tax-exempt trusts under new IRC §530A for paying qualified medical expenses (i.e., same definition as for health savings accounts) of an account beneficiary. (Thus, account assets grow tax-free if used solely for such expenses; nonqualified distributions are taxable, and accounts are subject to unrelated business income tax.) A HOPE Account must meet trust requirements including (1) cash-only contributions subject to annual limits based on monthly eligibility, (2) permissible trustees (e.g., banks or insurers), (3) no investments in life insurance contracts or commingling of assets (except common funds), (4) nonforfeitable beneficiary interests, (5) reasonable administrative fees, and (6) procedures to ensure distributions are only for qualified medical expenses of the beneficiary, spouse, or dependents, with required reporting on Form 5498-A (including flexible spending account contributions). Eligibility for contributions in a month requires minimum essential coverage (or Indian Health Service care for tribal members) and no contributions to a health FSA, HSA, HRA, or Archer MSA (except certain disregarded coverage). Rules similar to those for IRAs and HSAs apply to timing of contributions, employer payments, community property, custodial accounts, divorce transfers, and death.