Bill Text: HI SB253 | 2014 | Regular Session | Introduced
Bill Title: Medical savings accounts
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2013-12-18 - Carried over to 2014 Regular Session. [SB253 Detail]
Download: Hawaii-2014-SB253-Introduced.html
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THE SENATE |
S.B. NO. |
253 |
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TWENTY-SEVENTH LEGISLATURE, 2013 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to medical savings accounts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 235, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:
"Part Medical Savings Accounts
§235-A Medical savings account act; establishment. This Act shall be known and may be cited as the "Medical Savings Account Act."
§235-B Establishment of accounts. (a) After December 31, 2011, an employer may offer to establish medical savings accounts.
(b) An employee on whose behalf a medical savings account has not been established by his or her employer may establish such an account on his or her own behalf.
(c) Each year an employer may contribute to an employee's medical savings account an amount that does not exceed three thousand dollars.
(d) If an employer establishes a medical savings account for an employee but contributes less than the maximum set forth in subsection (c), the employee may contribute the difference in accordance with the provisions of section 235-C.
§235-C Employee contributions; pretax. (a) All employee contributions to medical savings accounts shall be made on a pretax basis. Such contributions are subject to the same limitations as employer contributions.
(b) An employee shall elect to make contributions to his or her medical savings account by signing a written election. Such election is to be in the form prescribed by the director of the department of taxation and is to be signed prior to the date the employer withholds the first contribution.
§235-D Employer contributions; tax deduction. Employer contributions to employee medical savings accounts shall constitute a deduction from the employer's state taxable income.
§235-E Distributions. (a) An account holder shall submit documentation of eligible medical expenses paid during the tax year to the account administrator, and the account administrator shall reimburse the account holder for such expenses.
(b) Moneys may be distributed from a medical savings account only for the purpose of:
(1) Reimbursing the eligible medical expenses of the account holder or his or her spouse or dependent child;
(2) Cashing out the balance in the account of a deceased account holder; or
(3) Cashing out an account holder's prior year's balance.
(c) An account holder may withdraw the balance in his or her account for any reason if such withdrawal occurs after the end of the year in which the moneys were contributed; however, such distributed moneys are subject to state income tax pursuant to section 235-G.
§235-F Restrictions. An account holder shall not use account moneys to fund a policy that covers the deductible for a qualified higher deductible health plan.
§235-G Taxation of account moneys. (a) Account moneys, including interest income, are not to be taxed as Hawaii adjusted gross income if they are:
(1) In an employee's medical savings account; or
(2) Withdrawn to pay eligible medical expenses.
(b) Account moneys are to be taxed as Hawaii adjusted gross income when such moneys are withdrawn for purposes other than the payment of eligible medical expenses.
(c) Upon the death of the account holder, the account principal, as well as any accumulated interest, is to be distributed to and taxed as part of the decedent's estate, as provided by law.
§235-H Portability. An account holder is the owner of his or her medical savings account and may change the account administrator of such an account upon leaving the employ of his or her employer."
SECTION 2. In codifying the new sections added by section 1 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.
SECTION 3. If any provision of this Act, or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the Act, which can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.
SECTION 4. This Act shall take effect on July 1, 2013, and shall apply to taxable years beginning after December 31, 2013.
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INTRODUCED BY: |
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Report Title:
Medical savings accounts
Description:
Establishes medical savings accounts.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
