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H.R. 247House115th Congress (2017-2019)In Committee

Health Savings Account Expansion Act of 2017

Sponsored by Dave BratRep. Dave Brat (R-VA)
Introduced January 4, 2017

AI-Generated Summary

Updated April 15, 2026 at 11:11 AM UTC

The Health Savings Account Expansion Act of 2017 changes the tax code to let people put more money into HSAs and use those funds for a broader range of health costs. It raises the annual contribution limit to $9,000 for individuals (or $18,000 for married couples) and permits HSA dollars to pay health‑insurance premiums and direct primary‑care fees. It also reduces the penalty on improper HSA withdrawals from 20% to 10%. The changes affect anyone who has an HSA and the tax rules that apply to those accounts.

Key Provisions

  • Increase the maximum HSA contribution to $9,000 per year for single filers and $18,000 for joint filers.
  • Allow HSA funds to be used for health‑insurance premium payments and for expenses related to direct primary‑care service arrangements.
  • Redefine "qualified medical expenses" to include these new categories and adjust related code sections accordingly.
  • Lower the penalty for non‑qualified HSA distributions from 20% to 10% for tax years beginning after 2017.

Legislative Activity

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1 earlier action
HouseIntro Referral Latest Action

Referred to the House Committee on Ways and Means.

Ways and Means Committee

January 4, 2017

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HouseIntro Referral

Introduced in House

January 4, 2017

HouseIntro Referral

Referred to the House Committee on Ways and Means.

Ways and Means Committee

January 4, 2017

Bill Text

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Introduced in HouseIssued January 4, 2017

I

115th CONGRESS

1st Session

H. R. 247

IN THE HOUSE OF REPRESENTATIVES

January 4, 2017

Mr. Brat (for himself, Mr. Gohmert, Mr. Meadows, Mr. Royce of California, Mr. Rokita, Mr. Schweikert, Mr. Guthrie, and Mr. Gosar) 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 expand the permissible use of health savings accounts to include health insurance payments and to increase the dollar limitation for contributions to health savings accounts, and for other purposes.

1.

Short title

This Act may be cited as the Health Savings Account Expansion Act of 2017.

2.

Adequate funds for health insurance plans

(a)

In general

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 ($18,000 in the case of a joint return).

(b)

Conforming amendments

(1)

Subsection (b) of such Code is amended by striking paragraphs (2), (3), and (5) and by redesignating paragraphs (4), (6), (7), and (8) as paragraphs (2), (3), (4), and (5), respectively.

(2)

Section 223(b)(2) of such Code (as redesignated by paragraph (1)) is amended by striking the last sentence.

(3)

Section 223(b)(4) of such Code (as redesignated by paragraph (1)) is amended to read as follows:

(4)

Medicare eligible individuals

The limitation under this subsection for any taxable year with respect to an individual shall—

(A)

in the case of the first taxable year in which such individual is entitled to benefits under title XVIII of the Social Security Act, be the amount which bears the same proportion to the amount in effect under paragraph (1) with respect to such individual as—

(i)

the number of months in the taxable year during which such individual was not so entitled, bears to

(ii)

12, and

(B)

be zero for any taxable year thereafter.

.

(4)

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

(A)

in the matter preceding subparagraph (A) by striking Each dollar amount in subsection (b)(2) and inserting In the case of taxable years beginning after December 31, 2017, each dollar amount in subsection (b)(1), and

(B)

by amending subparagraph (B) to read as follows:

(B)

the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which such taxable year begins determined by substituting calendar year 2016 for calendar year 1992.

.

(c)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2017.

3.

Parity with employer-provided health insurance; direct primary care

(a)

In general

Section 223(d)(2) of the Internal Revenue Code of 1986 is amended to read as follows:

(2)

Qualified medical expenses

(A)

In general

The term qualified medical expenses means, with respect to an account beneficiary, amounts paid by such beneficiary for medical care (as defined in section 213(d)) for such individual, the spouse of such individual, and any dependent (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) of such individual, but only to the extent such amounts are not compensated for by insurance or otherwise.

(B)

Direct primary care

(i)

In general

Such term includes expenses for direct primary care service arrangements.

(ii)

Direct primary care service arrangements

For purposes of clause (i), the term direct primary care service arrangements means an arrangement under which an individual is provided coverage restricted to primary care services in exchange for a fixed periodic fee or payment for primary care services.

.

(b)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2017.

4.

Freedom from mandate

(a)

In general

Section 223 of the Internal Revenue Code of 1986, as amended by sections 2 and 3, is amended by striking subsection (c) and redesignating subsections (d) through (h) as subsections (c) through (g), respectively.

(b)

Conforming amendments

(1)

Subsection (a) of section 223 of such Code is amended to read as follows:

(a)

Deduction allowed

In the case of an individual, there shall be allowed as a deduction for a taxable year an amount equal to the aggregate amount paid in cash during such taxable year by or on behalf of such individual to a health savings account of such individual.

.

(2)

Subsection (b) of section 223 of such Code (as amended by section 2) is amended by striking paragraph (5).

(3)

Section 223(c)(1)(A) of such Code (as redesignated by subsection (a)) is amended—

(A)

by striking subsection (f)(5) and inserting subsection (e)(5), and

(B)

in clause (ii) by striking the sum
of— and all that follows and inserting the dollar amount in effect under subsection (b)(1)..

(4)

Section 223(f)(1) of such Code (as redesignated by subsection (a)) is amended by striking subsections (b)(1) and (c)(2)(A) and inserting subsection (b)(1).

(5)

Section 26(b)(2)(U) of such Code is amended by striking section 223(f)(4) and inserting section 223(e)(4).

(6)

Sections 35(g)(3), 220(f)(5)(A), 848(e)(1)(v), 4973(a)(5), and 6051(a)(12) of such Code are each amended by striking section 223(d) each place it appears and inserting section 223(c).

(7)

Section 106(d)(1) of such Code is amended—

(A)

by striking who is an eligible individual (as defined in section 223(c)(1)), and

(B)

by striking section 223(d) and inserting section 223(c).

(8)

Section 408(d)(9) of such Code is amended—

(A)

in subparagraph (A) by striking who is an eligible individual (as defined in section 223(c)) and, and

(B)

in subparagraph (C) by striking computed on the basis of the type of coverage under the high deductible health plan covering the individual at the time of the qualified HSA funding distribution.

(9)

Section 877A(g)(6) of such Code is amended by striking 223(f)(4) and inserting 223(e)(4).

(10)

Section 4973(g) of such Code is amended—

(A)

by striking section 223(d) and inserting section 223(c),

(B)

in paragraph (2), by striking section 223(f)(2) and inserting section 223(e)(2), and

(C)

by striking section 223(f)(3) and inserting section 223(e)(3).

(11)

Section 4975 of such Code is amended—

(A)

in subsection (c)(6)—

(i)

by striking section 223(d) and inserting section 223(c), and

(ii)

by striking section 223(e)(2) and inserting section 223(d)(2), and

(B)

in subsection (e)(1)(E), by striking section 223(d) and inserting section 223(c).

(12)

Section 6693(a)(2)(C) of such Code is amended by striking section 223(h) and inserting section 223(g).

(c)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2017.

5.

Restoring Lower Penalty for Nonqualified Distributions

(a)

HSAs

Section 223(e)(4)(A) of the Internal Revenue Code of 1986, as amended by section 4, is amended by striking 20 percent and inserting 10 percent.

(b)

Effective date

The amendment made by this section shall apply to distributions made in taxable years beginning after December 31, 2017.