text: 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          the Internal Revenue Code of 1986 are hereby repealed.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.
target: 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.
feat_title: To amend the Internal Revenue Code of 1986 to expand the availability of Archer medical savings accounts.