PUBLIC LAW 108–173—DEC. 8, 2003
117 STAT. 2473
the Secretary that the manner in which such person will administer the trust will be consistent with the requirements of this section. ‘‘(C) No part of the trust assets will be invested in life insurance contracts. ‘‘(D) The assets of the trust will not be commingled with other property except in a common trust fund or common investment fund. ‘‘(E) The interest of an individual in the balance in his account is nonforfeitable. ‘‘(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) of such individual, but only to the extent such amounts are not compensated for by insurance or otherwise. ‘‘(B) HEALTH INSURANCE MAY NOT BE PURCHASED FROM ACCOUNT.—Subparagraph (A) shall not apply to any payment for insurance. ‘‘(C) EXCEPTIONS.—Subparagraph (B) shall not apply to any expense for coverage under— ‘‘(i) a health plan during any period of continuation coverage required under any Federal law, ‘‘(ii) a qualified long-term care insurance contract (as defined in section 7702B(b)), ‘‘(iii) a health plan during a period in which the individual is receiving unemployment compensation under any Federal or State law, or ‘‘(iv) in the case of an account beneficiary who has attained the age specified in section 1811 of the Social Security Act, any health insurance other than a medicare supplemental policy (as defined in section 1882 of the Social Security Act). ‘‘(3) ACCOUNT BENEFICIARY.—The term ‘account beneficiary’ means the individual on whose behalf the health savings account was established. ‘‘(4) CERTAIN RULES TO APPLY.—Rules similar to the following rules shall apply for purposes of this section: ‘‘(A) Section 219(d)(2) (relating to no deduction for rollovers). ‘‘(B) Section 219(f)(3) (relating to time when contributions deemed made). ‘‘(C) Except as provided in section 106(d), section 219(f)(5) (relating to employer payments). ‘‘(D) Section 408(g) (relating to community property laws). ‘‘(E) Section 408(h) (relating to custodial accounts). ‘‘(e) TAX TREATMENT OF ACCOUNTS.— ‘‘(1) IN GENERAL.—A health savings account is exempt from taxation under this subtitle unless such account has ceased to be a health savings account. Notwithstanding the preceding sentence, any such account is subject to the taxes imposed by section 511 (relating to imposition of tax on unrelated business income of charitable, etc. organizations).
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