article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Medical Savings Account Availability Act of 2001''. SEC. 2. EXPANSION OF AVAILABILITY OF ARCHER MEDICAL SAVINGS ACCOUNTS. (a) Repeal of Limitations on Number of Medical Savings Accounts.-- (1) In general.--Subsections (i) and (j) of section 220 of the Internal Revenue Code of 1986 are hereby repealed. (2) Conforming amendments.-- (A) Paragraph (1) of section 220(c) of such Code is amended by striking subparagraph (D). (B) Section 138 of such Code is amended by striking subsection (f). (b) Availability Not Limited to Accounts for Employees of Small Employers and Self-Employed Individuals.-- (1) In general.--Subparagraph (A) of section 220(c)(1) of such Code (relating to eligible individual) is amended to read as follows: ``(A) In general.--The term `eligible individual' means, with respect to any month, any individual if-- ``(i) such individual is covered under a high deductible health plan as of the 1st day of such month, and ``(ii) such individual is not, while covered under a high deductible health plan, covered under any health plan-- ``(I) which is not a high deductible health plan, and ``(II) which provides coverage for any benefit which is covered under the high deductible health plan.''. (2) Conforming amendments.-- (A) Section 220(c)(1) of such Code is amended by striking subparagraph (C). (B) Section 220(c) of such Code is amended by striking paragraph (4) (defining small employer) and by redesignating paragraph (5) as paragraph (4). (C) Section 220(b) of such Code is amended by striking paragraph (4) (relating to deduction limited by compensation) and by redesignating paragraphs (5), (6), and (7) as paragraphs (4), (5), and (6), respectively. (c) Increase in Amount of Deduction Allowed for Contributions to Medical Savings Accounts.-- (1) In general.--Paragraph (2) of section 220(b) of such Code is amended to read as follows: ``(2) Monthly limitation.--The monthly limitation for any month is the amount equal to \1/12\ of the annual deductible (as of the first day of such month) of the individual's coverage under the high deductible health plan.''. (2) Conforming amendment.--Clause (ii) of section 220(d)(1)(A) of such Code is amended by striking ``75 percent of''. (d) Both Employers and Employees May Contribute to Medical Savings Accounts.--Paragraph (4) of section 220(b) of such Code (as redesignated by subsection (b)(2)(C)) is amended to read as follows: ``(4) Coordination with exclusion for employer contributions.--The limitation which would (but for this paragraph) apply under this subsection to the taxpayer for any taxable year shall be reduced (but not below zero) by the amount which would (but for section 106(b)) be includible in the taxpayer's gross income for such taxable year.''. (e) Reduction of Permitted Deductibles Under High Deductible Health Plans.-- (1) In general.--Subparagraph (A) of section 220(c)(2) of such Code (defining high deductible health plan) is amended-- (A) by striking ``$1,500'' in clause (i) and inserting ``$1,000''; and (B) by striking ``$3,000'' in clause (ii) and inserting ``$2,000''. (2) Conforming amendment.--Subsection (g) of section 220 of such Code is amended to read as follows: ``(g) Cost-of-Living Adjustment.-- ``(1) In general.--In the case of any taxable year beginning in a calendar year after 1998, each dollar amount in subsection (c)(2) shall be increased by an amount equal to-- ``(A) such dollar amount, multiplied by ``(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which such taxable year begins by substituting `calendar year 1997' for `calendar year 1992' in subparagraph (B) thereof. ``(2) Special rules.--In the case of the $1,000 amount in subsection (c)(2)(A)(i) and the $2,000 amount in subsection (c)(2)(A)(ii), paragraph (1)(B) shall be applied by substituting `calendar year 2000' for `calendar year 1997'. ``(3) Rounding.--If any increase under paragraph (1) or (2) is not a multiple of $50, such increase shall be rounded to the nearest multiple of $50.''. (f) Providing Incentives for Preferred Provider Organizations To Offer Medical Savings Accounts.--Clause (ii) of section 220(c)(2)(B) of such Code is amended by striking ``preventive care if'' and all that follows and inserting ``preventive care.'' (g) Medical Savings Accounts May Be Offered Under Cafeteria Plans.--Subsection (f) of section 125 of such Code is amended by striking ``106(b),''. (h) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2001.
summary: Medical Savings Account Availability Act of 2001 - Amends the Internal Revenue Code with respect to medical savings accounts to: (1) repeal restrictions on the number of accounts which may be established; and (2) expand the availability of such accounts to individuals other than the self-employed and employees of small employers.