To amend the Internal Revenue Code of 1986 to allow distributions from a health flexible spending arrangement or health reimbursement arrangement directly to a health savings account in connection with establishing coverage under a high deductible health plan.

This bill allows employees to directly transfer funds from a health flexible spending account (FSA) or health reimbursement arrangement (HRA) to a health savings account (HSA) when switching to a high-deductible health plan after a gap in coverage. It sets a dollar limit on these transfers based on annual HSA contribution rules and requires the transfer to occur after a significant period without coverage. Employers must report these transfers on employees' W-2 forms. The changes apply to distributions made after December 31, 2023.