H.R. 7242

116TH CONGRESS
2D SESSION

H.R. 7242

To amend the Internal Revenue Code of 1986 to permit expenditures
from health savings accounts for gym memberships and costs of home
gym equipment, to repeal the requirement that health plan be
high deductible, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JUNE 18, 2020

Mr. CURTIS (for himself and Ms. KENDRA S. HORN of Oklahoma) 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 permit expenditures from health savings accounts for gym memberships and costs of home gym equipment, to repeal the requirement that health plan be high deductible, 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. HEALTH SAVINGS ACCOUNTS.

(a) REPEAL OF LIMITATION ON MEDICARE-ELIGIBLE INDIVIDUALS. — Section 223(b) of the Internal Revenue Code of 1986 is amended by striking paragraph (7).

(b) QUALIFIED MEDICAL EXPENSES. —

(1) GYM MEMBERSHIPS AND HOME GYM EQUIPMENT. — Section 223(d)(2) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

"(E) FITNESS FACILITY MEMBERSHIPS AND HOME GYM EQUIPMENT. —

"(i) IN GENERAL. — Amounts paid for medical care include —

"(I) amounts paid for member-ship at a fitness facility, and

"(II) amounts paid for home gym equipment.

"(ii) LIMITATION. — The amount taken into account under clause (i) for any tax-able year shall not exceed —

"(I) $100 for membership at a fitness facility, and

"(II) $500 for home gym equipment.

"(iii) FITNESS FACILITY DEFINED. — The term 'fitness facility' means a facility —

"(I) providing instruction in a program of physical exercise, offering facilities for the preservation, maintenance, encouragement, or development of physical fitness, or serving as the site of such a program of a State or local government,

"(II) which is not a private club owned and operated by its members,

"(III) which does not offer golf, hunting, sailing, or riding facilities,

"(IV) whose health or fitness facility is not incidental to its overall function and purpose, and

"(V) which is fully compliant with the State of jurisdiction and Federal anti-discrimination laws.

"(iv) HOME GYM EQUIPMENT. — The term 'home gym equipment' means equipment that —

"(I) can be purchased for the preservation, maintenance, encouragement, or development of physical fit-ness in an individual's home residence, and

"(II) is used exclusively at a residence of the individual for the purposes of promoting physical exercise.".

(2) DIETARY NUTRITIONAL SUPPLEMENTS. — Section 223(d)(2) of such Code, as amended by paragraph (1), is amended by adding at the end the following:

"(F) DIETARY NUTRITIONAL SUPPLEMENT. — Amounts paid for a dietary supplement (as defined in section 201(ff) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321(ff)) shall be treated as amounts paid for medical care.".

(c) PREMIUMS FOR CERTAIN EXCHANGE HEALTH PLANS. — Subparagraph (B) of section 223(d)(2) of such Code is amended to read as follows:

"(B) HEALTH INSURANCE MAY NOT BE PURCHASED FROM ACCOUNT. —

"(i) IN GENERAL. — Subparagraph (A) shall not apply to any payment for insurance.

"(ii) EXCEPTION RELATING TO PREMIUMS FOR CERTAIN EXCHANGE HEALTH PLANS. —

"(I) IN GENERAL. — Clause (i) shall not apply in the case of a tax-payer who, but for the limitation relating to household income, would be an applicable taxpayer for purposes of the premium assistance credit under section 36B.

"(II) LIMITATION. — The amount taken into account under this clause for any coverage month (as defined in section 36B(c)(2)) may not exceed the amount specified in section 36B(b)(2)(A).".

(d) REPEAL OF REQUIREMENT THAT HEALTH PLAN BE HIGH DEDUCTIBLE. —

(1) ELIGIBLE INDIVIDUAL. — Paragraph (1) of section 223(c) of such Code is amended to read as follows:

"(1) ELIGIBLE INDIVIDUAL. —

"(A) IN GENERAL. — The term 'eligible individual' means, with respect to any month, any individual if such individual is covered under a health plan as of the first day of such month.

"(B) EXCLUSION OF CERTAIN PLANS. — Such term does not include a health plan if substantially all of its coverage is —

"(i) coverage for any benefit provided by permitted insurance,

"(ii) coverage (whether through insurance or otherwise) for accidents, disability, dental care, vision care, long-term care, or (in the case of plan years beginning on or before December 31, 2021) telehealth and other remote care, and

"(iii) for taxable years beginning after December 31, 2006, coverage under a health flexible spending arrangement during any period immediately following the end of a plan year of such arrangement during which unused benefits or contributions remaining at the end of such plan year may be paid or reimbursed to plan participants for qualified benefit expenses incurred during such period if —

"(I) the balance in such arrangement at the end of such plan year is zero, or

"(II) the individual is making a qualified HSA distribution (as defined in section 106(e)) in an amount equal to the remaining balance in such arrangement as of the end of such plan year, in accordance with rules prescribed by the Secretary.

"(C) SPECIAL RULE FOR INDIVIDUALS ELIGIBLE FOR CERTAIN VETERANS BENEFITS. — An individual shall not fail to be treated as an eligible individual for any period merely because the individual receives hospital care or medical services under any law administered by the Secretary of Veterans Affairs for a service-connected disability (within the meaning of section 101(16) of title 38, United States Code).".

(2) DEFINITION. — Section 223(c) of such Code is amended by striking paragraph (2) and redesignating paragraphs (3), (4), and (5) as paragraphs (2), (3), and (4), respectively.

(e) DEDUCTIBLE AMOUNT; MONTHLY LIMITATION. — Section 223(b)(2) of such Code is amended to read as follows:

"(2) MONTHLY LIMITATION. — The monthly limitation for any month is ¹⁄12 of the deductible amount in effect under section 219(b) for the tax-able year in which the month occurs.".

(f) SPECIAL RULE RELATING TO DEPENDENTS. —  Paragraph (6) of section 223(b) of such Code is amended to read as follows:

"(6) SPECIAL RULE RELATING TO DEPENDENTS. — A contribution to a health savings account of a dependent of the individual to whom a deduction under section 151(c) is allowable for the taxable year shall be treated as an amount paid to the health savings account of the individual to whom a deduction is allowable under this section.".

(g) CONFORMING AMENDMENTS. —

(1) Section 223(b) of such Code is amended —

(A) by striking paragraph (3) (relating to additional contributions for individuals 55 or older);

(B) by striking paragraph (5) (relating to special rule for married individuals);

(C) in paragraph (8)(A)(ii) by striking "high deductible"; and

(D) in the heading for paragraph (8)(B) by striking "HIGH DEDUCTIBLE".

(2) Section 223(b) of such Code, as amended by paragraph (1) and the preceding subsections of this section, is further amended by redesignating paragraphs (4), (6), and (8), as paragraphs (3), (4), and (5), respectively.

(3) Section 224(d)(1)(A)(ii) of such Code is amended by striking "exceeds the sum of — " and all that follows and inserting "exceeds the dollar amount in effect under subsection (b)(2).".

(4) Section 223 of such Code is amended by striking subsection (g) and redesignating subsection (h) as subsection (g).

(5) Section 223(g)(2) of such Code, as redesignated by paragraph (4), is amended by striking "high deductible".

(h) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.