In 2003, Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (the "Act"). The Act authorized states to create health savings accounts ("HSAs") with tax-preferred treatment to encourage individuals with high-deductible health insurance plans to save for their healthcare expenses. Recent data suggests that the popularity of HSA accounts is growing, with one study estimating that the number of HSA accounts rose to 13.8 million in 2014, which is a twenty-nine percent (29%) increase from 2013.

Unsurprisingly, individuals who have taken advantage of the tax-preferred treatment of HSA accounts, who also seek to take advantage of the protections of the Bankruptcy Code, desire to withhold the funds they have deposited into these tax-preferred HSA accounts from distribution to creditors. In response, numerous states have passed legislation to exempt deposits into HSA accounts from property of a debtor's bankruptcy estate, thereby allowing the debtor to retain the funds therein to the exclusion of their creditors. Within Burr & Forman's footprint, Florida, Mississippi, and Tennessee have passed statutes exempting HSA contributions from a debtor's bankruptcy estate.