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S. 2802 - Responsible Additions and Increases to Sustain Employee Health Benefits Act of 2018

Sponsor: Roy Blunt (R)
Introduced: 2018-05-08
Bill Status: Read twice and referred to the Committee on Finance.
 

Responsible Additions and Increases to Sustain Employee Health Benefits Act of 2018

This bill amends the Internal Revenue Code, with respect to the tax exclusion for distributions from health flexible spending arrangements provided under a cafeteria plan, to: (1) increase the annual limit on employee salary reduction contributions to $5,000, with an additional $500 for each additional employee dependent above two dependents that has not been taken into account by another person for the year; (2) revise the adjustment for inflation after 2018; and (3) allow a carryforward into the next year for unused amounts in such plans.

Full Text


115th CONGRESS
2d Session
S. 2802


    To amend the Internal Revenue Code of 1986 to provide the opportunity for responsible health savings to all American families.


IN THE SENATE OF THE UNITED STATES

May 8, 2018

    Mr. Blunt introduced the following bill; which was read twice and referred to the Committee on Finance


A BILL

    To amend the Internal Revenue Code of 1986 to provide the opportunity for responsible health savings to all American families.

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 “Responsible Additions and Increases to Sustain Employee Health Benefits Act of 2018”.

SEC. 2. Expandable health flexible spending arrangements.

(a) Expansion of annual maximum.—

(1) IN GENERAL.—Paragraph (1) of section 125(i) of the Internal Revenue Code of 1986 is amended—

(A) by striking “$2,500” and inserting “$5,000, with an additional $500 per each additional employee dependent above two dependents”; and

(B) by inserting at the end the following: “An additional employee dependent may not be taken into account under the preceding sentence for any taxable year if such additional employee dependent has been taken into account by another person under such sentence for such taxable year.”.

(2) ADJUSTMENT FOR INFLATION.—Paragraph (2) of section 125(i) of the Internal Revenue Code of 1986 is amended—

(A) by striking “December 31, 2013” and inserting “December 31, 2018”;

(B) by striking “the dollar amount” and inserting “each of the dollar amounts”; and

(C) in subparagraph (B), by striking “calendar year 2012” and inserting “calendar year 2017”.

(b) Carryforward of unused benefits.—Section 125(i) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

“(3) CARRYFORWARD OF UNUSED BENEFITS.—

“(A) IN GENERAL.—A plan or arrangement may permit a participant in a health flexible spending arrangement to elect to carry forward any aggregate unused balances in the participant’s accounts under such arrangement as of the close of any year to the succeeding year. Such carryforward shall be treated as having occurred within 30 days of the close of the year.

“(B) LIMITATION.—The amount which a participant may elect to carry forward under subparagraph (A) from any year shall be any aggregate unused balances in the participant’s account at the close of any year.

“(C) EXCLUSION FROM GROSS INCOME.—No amount shall be included in gross income under this chapter by reason of any car­ry­for­ward under this paragraph.

“(D) COORDINATION LIMITS.—The maximum amount which may be contributed to a health flexible spending arrangement for any year to which an unused amount is carried under this paragraph shall not be reduced by such unused amount.”.

(c) Conforming amendment.—Section 125(i) of the Internal Revenue Code of 1986 is amended by striking “Limitation on flexible spending arrangements” in the heading and inserting “Special rules for health flexible spending arrangements”.

(d) Effective date.—The amendments made by this section shall take effect on the date of the enactment of this Act.


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