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1 1 Amend House File 2298 as follows:
1 2 #1. Page 1, by inserting before line 1 the
1 3 following:
1 4 "Section 101. Section 422.7, Code Supplement 1995,
1 5 is amended by adding the following new subsections:
1 6 NEW SUBSECTION. 32A. Subtract up to one thousand
1 7 eight hundred dollars contributed by the individual,
1 8 the individual's employer, or a public agency, in the
1 9 aggregate to a family health account for the
1 10 individual, or up to four thousand two hundred dollars
1 11 contributed by the individual, the individual's
1 12 employer, or a public agency, in the aggregate to a
1 13 family health account for the individual and the
1 14 individual's spouse and dependents. However, the
1 15 amount to be subtracted shall be reduced, but not
1 16 below zero, by the amount of health insurance premiums
1 17 paid by the taxpayer's employer covering the taxpayer
1 18 or the taxpayer's spouse or dependent which premiums
1 19 were not subject to state income tax.
1 20 NEW SUBSECTION. 32B. Subtract to the extent
1 21 included, interest earned in the tax year on a family
1 22 health account unless the interest is withdrawn and
1 23 not used for any of the approved purposes described in
1 24 section 505.22, subsection 1, paragraph "f".
1 25 NEW SUBSECTION. 32C. Add to the extent not
1 26 included, amounts withdrawn from a family health
1 27 account which were not used for any of the approved
1 28 purposes described in section 505.22, subsection 1,
1 29 paragraph "f", and which represent tax benefits
1 30 previously taken by the individual.
1 31 NEW SUBSECTION. 32D. Subtract the amount of
1 32 premiums paid by the taxpayer for the renewal of a
1 33 long-term care insurance policy or contract certified
1 34 by the division of insurance pursuant to chapter 249G
1 35 which covers the taxpayer, taxpayer's spouse, or
1 36 dependent children. The taxpayer may elect to take
1 37 for premiums paid during the tax year the deduction
1 38 authorized by this subsection or the credit under
1 39 section 422.11 to the extent the premiums have not
1 40 been deducted in subsection 32 of this section.
1 41 Sec. 102. NEW SECTION. 422.11 LONG-TERM CARE
1 42 INSURANCE CREDIT.
1 43 The tax imposed under this division, less the
1 44 credits allowed under sections 422.11A, 422.11B,
1 45 422.11C, 422.12, and 422.12B, shall be reduced by a
1 46 long-term care insurance credit. The amount of the
1 47 credit is equal to the first one hundred dollars paid
1 48 in premiums by the taxpayer during the tax year for
1 49 the renewal of a long-term care insurance policy or
1 50 contract certified by the division of insurance
2 1 pursuant to chapter 249G which covers the taxpayer,
2 2 taxpayer's spouse, or dependent children. Any amounts
2 3 paid in premiums for long-term coverage that are
2 4 claimed as a credit shall not be deducted as a medical
2 5 expense under section 422.9, subsection 2, or as
2 6 health insurance costs of self-employed individuals
2 7 under section 162(l) of the Internal Revenue Code. A
2 8 credit under this section for the premiums paid in the
2 9 tax year may not be taken if the taxpayer takes a
2 10 deduction under section 422.7, subsection 32D, for
2 11 those premiums.
2 12 Any credit in excess of the tax liability for the
2 13 tax year is refundable. In lieu of claiming a refund,
2 14 the taxpayer may elect to have the overpayment shown
2 15 on the taxpayer's final, completed return credited to
2 16 the tax liability for the following tax year.
2 17 Sec. 103. NEW SECTION. 505.23 FAMILY HEALTH
2 18 ACCOUNT AUTHORIZED.
2 19 1. A financial instrument known as the family
2 20 health account is established. A family health
2 21 account shall have all of the following
2 22 characteristics:
2 23 a. The account is kept in the name of the
2 24 individual, the individual's spouse, or the
2 25 individual's dependent.
2 26 b. Deposits of up to one thousand eight hundred
2 27 dollars for an individual and four thousand two
2 28 hundred dollars for an individual and the individual's
2 29 spouse or dependents can be made to the family health
2 30 account in the year.
2 31 c. The account earns income or interest.
2 32 d. In the case of death of an individual with a
2 33 family health account, the balance may be transferred
2 34 to the account of the spouse or dependent or an
2 35 account may be set up for the spouse or dependent.
2 36 The balance of an individual's family health account
2 37 that transfers to the spouse or dependent at the time
2 38 of death is not subject to the state inheritance tax.
2 39 e. A family health account may be used for any of
2 40 the following purposes and payments from the account
2 41 are restricted to the following:
2 42 (1) To receive subsidies from the state or federal
2 43 government to assure access to health insurance or
2 44 health care.
2 45 (2) To receive contributions from employers and
2 46 others on a tax-exempt basis to the extent otherwise
2 47 permitted by state or federal income tax law.
2 48 (3) To receive deposits of pretax income to
2 49 provide a savings vehicle for future insurance
2 50 premium, copayment, and deductible requirements.
3 1 (4) To accrue interest income on a tax-exempt or
3 2 tax-deferred basis to the extent otherwise permitted
3 3 by state or federal income tax law.
3 4 (5) To purchase a private health plan from an
3 5 insurer, health maintenance organization, or organized
3 6 delivery system authorized to do business in Iowa,
3 7 either directly or through a health insurance
3 8 purchasing cooperative.
3 9 (6) To participate in an employer-sponsored health
3 10 benefit plan.
3 11 (7) To exercise rights through an employer-
3 12 sponsored health benefit plan provided under the
3 13 federal Consolidated Omnibus Budget Reconciliation Act
3 14 of 1986.
3 15 (8) To make payments to health care providers
3 16 necessary to satisfy copayment or deductible
3 17 requirements under a health plan.
3 18 (9) To make payments to licensed health care
3 19 providers.
3 20 (10) To make payments for necessary and
3 21 appropriate long-term care services, and long-term
3 22 care insurance coverage approved by the commissioner.
3 23 f. Amounts withdrawn for any of the following
3 24 approved purposes do not result in income to the
3 25 holder of a family health account:
3 26 Payment of costs identified under paragraph "e",
3 27 subparagraphs (5), (6), (7), (8), (9), and (10), for
3 28 the individual, the individual's spouse, and the
3 29 individual's dependents to the extent that the
3 30 expenditures qualify for the deduction for medical
3 31 care under section 213(a) of the Internal Revenue Code
3 32 without regard to whether the expenditures exceed
3 33 seven and one-half percent of the individual's federal
3 34 adjusted gross income. However, any expenditure for
3 35 an approved purpose which is paid from the family
3 36 health account shall not be deducted as a medical
3 37 expense under section 422.9, subsection 2, as health
3 38 insurance costs of self-employed individuals under
3 39 section 162(1) of the Internal Revenue Code, or as
3 40 costs of health benefits coverage or insurance under
3 41 section 422.7, subsection 32.
3 42 g. A financial institution holding a family health
3 43 account shall make an annual report to the department
3 44 of revenue and finance on contributions and
3 45 withdrawals to the account in the year pursuant to
3 46 rules of the department.
3 47 h. A financial institution administering a family
3 48 health account shall be able to process claims against
3 49 the account electronically subject to reasonable terms
3 50 and conditions as determined by the insurance division
4 1 and consistent with the requirements of the community
4 2 health management information system.
4 3 i. If an individual makes a withdrawal from the
4 4 individual's family health account in the tax year and
4 5 the withdrawal is not for one of the purposes
4 6 described in paragraph "f", a civil penalty of ten
4 7 percent shall be imposed on the amount withdrawn
4 8 pursuant to rules of the department.
4 9 2. As a condition of maintaining a family health
4 10 account the individual or family must secure and
4 11 maintain a health benefit plan. The plan must provide
4 12 for copayments, deductibles, or out-of-pocket maximums
4 13 consistent with the average balance of the family
4 14 health account.
4 15 3. As used in this section, unless the context
4 16 otherwise requires:
4 17 a. "Account holder" means an individual for whose
4 18 benefit a family health account is established.
4 19 b. "Dependent" means the same as defined in
4 20 section 152 of the Internal Revenue Code.
4 21 c. "Financial institution" means a private
4 22 insurer, health maintenance organization, organized
4 23 delivery system, health insurance purchasing
4 24 cooperative, or a financial institution approved by
4 25 the insurance division as an investment mechanism for
4 26 family health accounts and licensed to do business in
4 27 this state.
4 28 d. "Internal Revenue Code" means the same as
4 29 defined in section 422.3.
4 30 Sec. . FAMILY HEALTH ACCOUNTS – STATE PILOT
4 31 PROJECT.
4 32 1. The department of personnel may develop and
4 33 implement a pilot project making the provisions of a
4 34 family health account, in accordance with section 103
4 35 of this Act, available to employees of the state. The
4 36 family health account shall be available to an
4 37 employee participating in the pilot project in lieu of
4 38 state group health insurance available to the employee
4 39 under chapter 509A.
4 40 2. In addition to the family health account
4 41 provisions under section 103 of this Act, the
4 42 department shall consider and include as part of the
4 43 pilot project any of the following provisions deemed
4 44 prudent by the department:
4 45 a. Providing an opportunity for the employee to
4 46 buy into a state group insurance plan under chapter
4 47 509A from the employee's family health account.
4 48 b. Providing catastrophic loss coverage.
4 49 c. Allowing the account to be used for preventive
4 50 health purchases such as fitness, smoking cessation,
5 1 and weight loss classes.
5 2 d. Providing options for those ancillary health
5 3 purchases available under the state's group health
5 4 insurance plans, including but not limited to
5 5 purchases of prescription drugs, vision care, and
5 6 dental care.
5 7 3. If the department decides to develop and
5 8 implement a pilot project, the department shall
5 9 implement the pilot project beginning January 1, 1997,
5 10 and the department shall present the pilot project
5 11 design on or before October 1, 1996, to the fiscal
5 12 committee of the legislative council."
5 13 #2. Page 2, by inserting after line 7 the
5 14 following:
5 15 "Sec. . Sections 101, 102, and 103 of this Act
5 16 take effect January 1, 1997, for tax years beginning
5 17 on or after that date."
5 18 #3. Title page, line 3, by inserting after the
5 19 word "physicians" the following: ", establishing
5 20 family health accounts, and providing applicability
5 21 and effective date provisions".
5 22
5 23
5 24
5 25 HALVORSON of Clayton
5 26 HF 2298.309 76
5 27 mj/cf
Text: H05603 Text: H05605 Text: H05600 - H05699 Text: H Index Bills and Amendments: General Index Bill History: General Index
Iowa General Assembly
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