Primary Care Enhancement Act of 2021

II 117TH CONGRESS 1ST SESSION S. 128 To amend the Internal Revenue Code of 1986 to provide for the treatment of direct primary care service arrangements as medical care, to provide that such arrangements do not disqualify deductible health savings ac- count contributions, and for other purposes. IN THE SENATE OF THE UNITED STATES JANUARY 28, 2021 Mr. CASSIDY (for himself, Mr. KELLY, Mr. SCOTT of South Carolina, and Mrs. SHAHEEN) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to provide for the treatment of direct primary care service arrange- ments as medical care, to provide that such arrange- ments do not disqualify deductible health savings account contributions, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Primary Care En- 4 hancement Act of 2021’’. 5 VerDate Sep 11 2014 16:55 Feb 11, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S128.IS S128 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 128 IS SEC. 2. TREATMENT OF DIRECT PRIMARY CARE SERVICE 1 ARRANGEMENTS. 2 (a) AMOUNT TREATED AS MEDICAL CARE.— 3 (1) IN GENERAL.—Section 213(d)(1) of the In- 4 ternal Revenue Code of 1986 is amended by striking 5 ‘‘or’’ at the end of subparagraph (C), by striking the 6 period at the end of subparagraph (D) and inserting 7 ‘‘, or’’, and by adding at the end the following new 8 subparagraph: 9 ‘‘(E) for direct primary care service ar- 10 rangements.’’. 11 (2) LIMITATION.—Section 213(d)(1) of such 12 Code, as amended by paragraph (1), is further 13 amended by adding at the end the following: ‘‘In the 14 case of a direct care primary service arrangement, 15 only eligible fee amounts (as defined in paragraph 16 (13)) shall be taken into account under subpara- 17 graph (E).’’. 18 (3) DEFINITIONS.—Section 213(d) of such 19 Code is amended by adding at the end the following 20 new paragraphs: 21 ‘‘(12) DIRECT PRIMARY CARE SERVICE AR- 22 RANGEMENT.— 23 ‘‘(A) IN GENERAL.—The term ‘direct pri- 24 mary care service arrangement’ means, with re- 25 spect to any individual, an arrangement under 26 VerDate Sep 11 2014 16:55 Feb 11, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S128.IS S128 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 128 IS which such individual is provided medical care 1 (as defined in paragraph (1), determined with- 2 out regard to subparagraph (E) thereof) con- 3 sisting solely of primary care services provided 4 by primary care practitioners (as defined in sec- 5 tion 1833(x)(2)(A) of the Social Security Act, 6 determined without regard to clause (ii) there- 7 of), if the sole compensation for such care is a 8 fixed periodic fee. 9 ‘‘(B) CERTAIN SERVICES SPECIFICALLY 10 EXCLUDED FROM TREATMENT AS PRIMARY 11 CARE SERVICES.—For purposes of this para- 12 graph, the term ‘primary care services’ shall not 13 include— 14 ‘‘(i) procedures that require the use of 15 general anesthesia, and 16 ‘‘(ii) laboratory services not typically 17 administered in an ambulatory primary 18 care setting. 19 The Secretary, after consultation with the Sec- 20 retary of Health and Human Services, shall 21 issue regulations or other guidance regarding 22 the application of this subparagraph. 23 ‘‘(13) ELIGIBLE FEE AMOUNT.— 24 VerDate Sep 11 2014 16:55 Feb 11, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S128.IS S128 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 128 IS ‘‘(A) IN GENERAL.—The term ‘eligible fee 1 amount’ means, with respect to any individual 2 for any month, the amount of fixed periodic 3 fees paid for a direct care primary service ar- 4 rangement, to the extent that the aggregate 5 fees for all direct primary care service arrange- 6 ments with respect to such individual for such 7 month do not exceed $150 (twice such dollar 8 amount in the case of an individual with any di- 9 rect primary care service arrangement that cov- 10 ers more than one individual). 11 ‘‘(B) INDEXING.—In the case of any tax- 12 able year beginning in a calendar year after 13 2022, the $150 amount contained in subpara- 14 graph (A) shall be increased by an amount 15 equal to— 16 ‘‘(i) such dollar amount, multiplied by 17 ‘‘(ii) the cost-of-living adjustment de- 18 termined under section 1(f)(3) for the cal- 19 endar year in which such taxable year be- 20 gins determined by substituting ‘calendar 21 year 2021’ for ‘calendar year 2016’ in sub- 22 paragraph (A)(ii) thereof. 23 VerDate Sep 11 2014 16:55 Feb 11, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S128.IS S128 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 128 IS If any increase under the preceding sentence is 1 not a multiple of $10, such increase shall be 2 rounded to the nearest multiple of $10.’’. 3 (b) HEALTH SAVINGS ACCOUNTS.—Section 223(c) of 4 the Internal Revenue Code of 1986 is amended by adding 5 at the end the following new paragraph: 6 ‘‘(6) TREATMENT OF DIRECT PRIMARY CARE 7 SERVICE ARRANGEMENTS.—A direct care primary 8 service arrangement (as defined in section 9 213(d)(12))— 10 ‘‘(A) shall not be treated as a health plan 11 for purposes of paragraph (1)(A)(ii), and 12 ‘‘(B) shall not be treated as insurance for 13 purposes of subsection (d)(2)(B).’’. 14 (c) REPORTING OF DIRECT PRIMARY CARE SERVICE 15 ARRANGEMENT FEES ON W–2.—Section 6051(a) of the 16 Internal Revenue Code of 1986 is amended by striking 17 ‘‘and’’ at the end of paragraph (16), by striking the period 18 at the end of paragraph (17) and inserting ‘‘, and’’, and 19 by inserting after paragraph (17) the following new para- 20 graph: 21 ‘‘(18) in the case of a direct primary care serv- 22 ice arrangement (as defined in section 213(d)(12)) 23 which is provided in connection with employment, 24 VerDate Sep 11 2014 16:55 Feb 11, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S128.IS S128 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 128 IS the aggregate fees for such arrangement for such 1 employee.’’. 2 (d) EFFECTIVE DATE.—The amendments made by 3 this section shall apply to months beginning after Decem- 4 ber 31, 2021, in taxable years ending after such date. 5 Æ VerDate Sep 11 2014 16:55 Feb 11, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\S128.IS S128 pamtmann on DSKBC07HB2PROD with BILLS