AB545-ASA1,2,28
71.05
(6) (a) 19. Any principal that is withdrawn, and any accumulated
9interest, dividends or other gain that accrues, from an account described under s.
10632.898 during the taxable year in which a withdrawal occurs from such an account
11if any amount of the money or other assets in the account is withdrawn for any reason
12other than the payment of medical care expenses or long-term care expenses or the
13purchase of long-term care insurance, as defined in s. 146.91 (1), for the account
1holder, his or her spouse and all nonspouse dependents, as defined in s. 632.898 (1)
2(b), except that this subdivision does not apply after the death of the account holder.
AB545-ASA1, s. 2
3Section
2. 71.05 (6) (b) 22. of the statutes is created to read:
AB545-ASA1,2,224
71.05
(6) (b) 22. Any amount that is deposited by an employer on behalf of that
5employer's employe, or by a self-employed person on his or her own behalf, in an
6account described under s. 632.898, up to $2,000 each year for an individual, up to
7$2,000 each year for his or her spouse and up to $1,000 each year for each nonspouse
8dependent, as defined in s. 632.898 (1) (b), and any interest, dividends or other gain
9that accrues in the account if the interest, dividends or other gain is redeposited in
10the account, if the account is used exclusively to pay the medical care expenses and
11long-term care expenses of the individual, his or her spouse and each minor
12dependent, or to purchase long-term care insurance, as defined in s. 146.91 (1), for
13such individuals. The maximum amount of a deposit to an account that is created
14under this subdivision shall be increased each year, beginning in 1998, by a
15percentage equal to the percentage change between the U.S. consumer price index
16for all urban consumers, U.S. city average, for the month of June of the current year
17and the U.S. consumer price index for all urban consumers, U.S. city average, for the
18month of June of the previous year, as determined by the U.S. department of labor.
19The revised amounts shall be rounded to the nearest whole number. The department
20of revenue shall adopt by rule the changes in dollar amounts required under this
21subdivision every year, and incorporate the changes in the income tax forms and
22instructions.
AB545-ASA1, s. 3
23Section
3. 71.07 (5) (a) 7. of the statutes is created to read:
AB545-ASA1,3,224
71.07
(5) (a) 7. The amount claimed as a deduction for unreimbursed medical
25care expenses under section
213 (a) of the internal revenue code to the extent that
1the funds used to pay for the unreimbursed expenses for which the deduction was
2claimed were withdrawn from an account described under s. 71.05 (6) (b) 22.
AB545-ASA1,3,54
71.10
(4) (j) Any amount of money or other assets computed under s. 71.83 (1)
5(c).
AB545-ASA1,3,117
71.83
(1) (c)
Medical savings account withdrawals. 1. Except as provided in
8subd. 2., if a person is required to add any amount to federal adjusted gross income
9under s. 71.05 (6) (a) 19., the person shall pay an amount equal to 10% of the amount
10that is withdrawn from the account that results in a person making a payment under
11s. 71.05 (6) (a) 19.
AB545-ASA1,3,1412
2. The penalty under subd. 1. does not apply and up to 25% of the balance in
13the account described under s. 632.898 may be withdrawn each year if any of the
14following occurs:
AB545-ASA1,3,1615
a. The account holder or his or her spouse reaches the age of 59.5 years during
16the year in which the withdrawal occurs.
AB545-ASA1,3,1717
b. The balance in the account exceeds $100,000.
AB545-ASA1,3,19
19632.898 Medical savings accounts. (1) In this section:
AB545-ASA1,3,2020
(a) "Account administrator" means any of the following:
AB545-ASA1,3,2221
1. A financial institution, the accounts of which are insured by the Federal
22Deposit Insurance Corporation or the national credit union share insurance fund.
AB545-ASA1,3,2323
2. A trust company bank organized under ch. 223.
AB545-ASA1,3,2424
3. An insurer authorized to do business in this state.
AB545-ASA1,3,2525
4. A broker-dealer licensed under subch. III of ch. 551.
AB545-ASA1,4,1
15. A plan administrator licensed under ch. 633.
AB545-ASA1,4,22
6. A certified public accountant licensed to practice in this state.
AB545-ASA1,4,33
7. An employer that has a self-insured health plan.
AB545-ASA1,4,44
8. An employer that participates in the program under this section.
AB545-ASA1,4,55
(b) "Dependent" has the meaning given in s. 635.02 (3c).
AB545-ASA1,4,96
(c) "High cost-share health plan" means any health insurance policy, certificate
7or contract with deductibles, copayments or other cost-sharing provisions of at least
8$1,500 if the insured's coverage is single or at least $3,000 if the insured's coverage
9is family.
AB545-ASA1,4,13
10(2) (a) An employer that, in providing health insurance coverage for its
11employes, offers its employes a choice of health benefit plan options that includes a
12high cost-share health plan may establish a medical savings account for an employe
13who chooses a high cost-share health plan.
AB545-ASA1,4,2514
(b) The medical savings account shall be established as a separate account in
15the employe's name and shall be the employe's property. The account may be
16established with any account administrator that is approved by the commissioner to
17administer medical savings accounts. The commissioner shall approve an account
18administrator to administer medical savings accounts if the account administrator
19insures the principal of the medical savings account against loss from any cause,
20including loss due to market fluctuation. Whenever an employer establishes a
21medical savings account on behalf of an employe, the employer shall notify the
22department of revenue, in the manner prescribed by the department of revenue, of
23the establishment of the account, the employe's name and social security number, the
24name and address of the account administrator and any other information that the
25department of revenue may require.
AB545-ASA1,5,10
1(c) Only an employer under par. (a), whether that employer established the
2account or is a succeeding employer of an employe for whom a medical savings
3account has been established, may make deposits in the medical savings account of
4an employe who chooses a high cost-share health plan. Except as provided in par.
5(d), such an employer shall deposit in the account the difference between what the
6employer pays on behalf of the employe, or the employe and his or her dependents,
7for the high cost-share health plan and what the employer would pay on behalf of
8the employe, or the employe and his or her dependents, for the most expensive health
9benefit plan that the employer offers that is not a high cost-share health plan.
10Except as provided in sub. (4) (a), no other deposits may be made in the account.
AB545-ASA1,5,1711
(d) An employer that establishes a medical savings account on behalf of an
12employe is not required to deposit in the account more than $2,000 per year for the
13employe if the employe's coverage is single, or more than $2,000 per year for the
14employe, $2,000 per year for the employe's spouse or $1,000 per year for each
15nonspouse dependent of the employe if the employe's coverage is family. Beginning
16in 1998, the amounts specified in this paragraph shall be increased each year in the
17manner provided in s. 71.05 (6) (b) 22.
AB545-ASA1,5,2118
(e) An employe who chooses a high cost-share health plan and for whom a
19medical savings account is established is not eligible for coverage under a different
20health benefit plan offered by the employer before the end of the policy term of the
21high cost-share health plan.
AB545-ASA1,6,3
22(3) (a) A self-employed person who purchases a high cost-share health plan
23may establish a medical savings account in his or her name. Upon establishing a
24medical savings account, a self-employed person shall notify the department of
25revenue, in the manner prescribed by the department of revenue, of the
1establishment of the account, the self-employed person's name and social security
2number, the name and address of the account administrator and any other
3information that the department of revenue may require.
AB545-ASA1,6,94
(b) Except as provided in par. (c), a self-employed person who establishes a
5medical savings account shall deposit in the account the difference between what the
6self-employed person pays for the high cost-share health plan, including coverage
7for his or her dependents, and what the self-employed person would pay for a more
8expensive health benefit plan, including coverage for his or her dependents. Except
9as provided in sub. (4) (b), no other deposits may be made in the account.
AB545-ASA1,6,1610
(c) A self-employed person who establishes a medical savings account is not
11required to deposit in the account more than $2,000 per year for himself or herself
12if the self-employed person's coverage is single, or more than $2,000 per year for
13himself or herself, $2,000 per year for his or her spouse or $1,000 per year for each
14nonspouse dependent if the self-employed person's coverage is family. Beginning in
151998, the amounts specified in this paragraph shall be increased each year in the
16manner provided in s. 71.05 (6) (b) 22.
AB545-ASA1,6,19
17(4) (a)
If an employe with a medical savings account under this section becomes
18self-employed and purchases a high cost-share health plan, he or she may make
19deposits in the account as provided in sub. (3).
AB545-ASA1,6,2320
(b) If a self-employed person with a medical savings account under this section
21becomes employed by an employer described in sub. (2) (a) and chooses a high
22cost-share health plan, the employer may make deposits in the account as provided
23in sub. (2).
AB545-ASA1,7,3
1(5) (a) Amounts deposited in an account under this section and any interest,
2dividends or other gain that accrues on amounts deposited in the account may be
3used only for any of the following:
AB545-ASA1,7,641. To pay expenses for medical care, as defined in
26 USC 213 (d) (1) and as
5limited in
26 USC 213 (b), including amounts treated as paid for medical care under
626 USC 213 (d) (2).
AB545-ASA1,7,87
2. To pay long-term care expenses of the employe or self-employed person or
8any of the employe's or self-employed person's dependents.
AB545-ASA1,7,109
3. To purchase a long-term care insurance policy for the employe or
10self-employed person or any of the employe's or self-employed person's dependents.
AB545-ASA1,7,1411
(b) An employe or self-employed person with a medical savings account shall
12provide information about the use of the account funds, in the manner prescribed by
13the department of revenue, in conjunction with the filing of his or her Wisconsin
14income tax return.
AB545-ASA1,7,1615
(c) Paragraph (a) does not apply after the death of the employe or self-employed
16person.
AB545-ASA1,7,21
17(6) (a)
A person that provides medical care, long-term care or a long-term care
18insurance policy, the cost of which is to be paid with funds in a medical savings
19account, shall bill the employe or self-employed person who is the holder of the
20account directly, rather than billing the account administrator of the medical savings
21account.
AB545-ASA1,7,2322
(b) The account administrator of a medical savings account shall do all of the
23following:
AB545-ASA1,7,2424
1. Permit withdrawals from the account at least once a month.
AB545-ASA1,7,2525
2. Issue an account statement to the holder of the account at least quarterly.
AB545-ASA1,8,2
2(1) This act first applies to taxable years beginning on January 1, 1997.