To make medical savings accounts available in connection with certain health plans under chapter 89 of title 5, United States Code, and for other purposes.

Amends Federal law relating to health insurance for Federal employees to authorize the Office of Personnel Management to contract for or approve one or more high deductible plans providing specified benefits. Allows the Government contribution for high deductible plans to be 100 percent of the subscription charge. Requires that, if 60 percent of the average subscription charge exceeds the total subscription charge of an employee's or annuitant's plan, the excess be paid into the employee's or annuitant's medical savings account. Determines that average disregarding high deductible plans.

Amends Internal Revenue Code medical savings account provisions to require, for those provisions, treating the Federal Government as a small employer. Exempts individuals in high deductible plans from provisions limiting: (1) the medical savings account deduction to the compensation of the individual (provides for coordination with the exclusion for employer contributions); and (2) the number of taxpayers having medical savings accounts.