                                 CODE OF VIRGINIA

THE VIRGINIA HEALTH SAVINGS ACCOUNT PLAN (§ 38.2-5601)

A. The Department of Taxation and the Commission shall amend the Virginia
Medical Savings Account Plan prepared pursuant to former &#xA7; 38.2-5600 in
order to address the provisions of the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003, P.L. No. 108-173, permitting eligible individuals
to establish health savings accounts pursuant to &#xA7; 223 of the Internal
Revenue Code of 1986, as amended, which amended Plan shall be designated as the
Virginia Health Savings Account Plan. The Department of Taxation and the
Commission shall present the Virginia Health Savings Account Plan to the Chairs
of the House Committees on Appropriations; Finance; Health and Human Services;
and Labor and Commerce and the Senate Committees on Finance and Appropriations;
Education and Health; and Commerce and Labor by January 1, 2006. Thereafter the
Department of Taxation and the Commission shall update the Plan annually and
provide copies of such updates to the chairs of such committees.

B. The Virginia Health Savings Account Plan shall, consistent with federal law
authorizing the establishment and use of health savings accounts, identify
measures by private and public entities that will increase the utilization and
efficacy of health savings accounts by the Commonwealth&#8217;s residents,
employers, and providers of health care coverage. The Plan shall include
recommendations for legislation that would increase the attractiveness of health
savings accounts, or eliminate barriers to their use, by providing:

   1. Definitions of eligible participants;

   2. Criteria for accounts, including, but not limited to, such matters as
   trustees, maximum amounts, and the rollover of balances in medical savings
   accounts to health savings accounts;

   3. Measures that would encourage public and private employers to offer, as
   part of a cafeteria menu of insurance plans, high-deductible health plans that
   would qualify for a health savings account pursuant to &#xA7; 223 of the
   Internal Revenue Code of 1986, as amended; and

   4. Any other provisions appropriate to maximize the use of health savings
   accounts within the Commonwealth.

C. The Plan shall include a report by the Commission on the availability of high
deductible health plans, as defined in &#xA7; 223 (c) (2) of the Internal
Revenue Code of 1986, as amended, in the Commonwealth.

D. The Plan shall include recommendations by the Department of Taxation for a
system of income tax deductions or refundable credits, consistent with federal
law and regulation, for (i) employers who voluntarily contribute to their
employees&#8217; health savings accounts, (ii) health care providers who
participate in providing care to health savings account holders at a reduced
cost or without compensation, and (iii) eligible individuals, as defined in
&#xA7; 223 (a) of the Internal Revenue Code of 1986, as amended, who qualify
under applicable federal or state definitions as members of the working poor.

HISTORY: 1995, c. 650; 2002, c. 372; 2005, cc. 503, 572.