Personalized Care Act of 2021

II 117TH CONGRESS 1ST SESSION S. 153 To amend the Internal Revenue Code of 1986 to expand and improve health savings accounts, and for other purposes. IN THE SENATE OF THE UNITED STATES FEBRUARY 2, 2021 Mr. CRUZ (for himself and Mr. RISCH) 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 expand and improve health savings accounts, 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 ‘‘Personalized Care Act 4 of 2021’’. 5 SEC. 2. HEALTH SAVINGS ACCOUNT ELIGIBILITY. 6 (a) IN GENERAL.—Paragraph (1) of section 223(c) 7 of the Internal Revenue Code of 1986 is amended to read 8 as follows: 9 VerDate Sep 11 2014 03:49 Feb 19, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S153.IS S153 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 153 IS ‘‘(1) ELIGIBLE INDIVIDUAL.—The term ‘eligible 1 individual’ means, with respect to any month, any 2 individual if such individual is— 3 ‘‘(A) covered under— 4 ‘‘(i) a group or individual health plan, 5 ‘‘(ii) health insurance coverage, in- 6 cluding a short term limited duration plan 7 or medical indemnity plan, or 8 ‘‘(iii) a government plan, including 9 coverage under the Medicare program 10 under part A or part B of title XVIII of 11 the Social Security Act, the Medicaid pro- 12 gram under title XIX of such Act, the 13 CHIP program under title XXI of such 14 Act or a qualified CHIP look-alike pro- 15 gram (as defined in section 2107(g) of 16 such Act), medical coverage under chapter 17 55 of title 10, United States Code (includ- 18 ing coverage under the TRICARE pro- 19 gram), a health care program under chap- 20 ter 17 or 18 of title 38, United States 21 Code, as determined by the Secretary of 22 Veterans Affairs in coordination with the 23 Secretary of Health and Human Services 24 and the Secretary, a medical care program 25 VerDate Sep 11 2014 03:49 Feb 19, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S153.IS S153 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 153 IS of the Indian Health Service or a tribal or- 1 ganization, or coverage under chapter 89 2 of title 5, United States Code, or 3 ‘‘(B) a participant in a health care sharing 4 ministry (as defined in section 5 5000A(d)(2)(B)(ii)), 6 as of the 1st day of such month.’’. 7 (b) CONFORMING AMENDMENTS.— 8 (1) Subsection (c) of section 223 of such Code 9 is amended by striking paragraphs (2) and (3) and 10 by redesignating paragraphs (4) and (5) as para- 11 graphs (2) and (3), respectively. 12 (2) Paragraphs (2)(A) and (2)(B) of section 13 223(b) of such Code are each amended by striking 14 ‘‘a high deductible health plan’’ and inserting ‘‘a 15 health plan, insurance, or ministry described in sub- 16 section (c)(1)’’. 17 (3) Paragraph (8)(A)(ii) of section 223(b) of 18 such Code is amended by striking ‘‘high deductible 19 health plan’’ and inserting ‘‘health plan, insurance, 20 or ministry described in subsection (c)(1)’’. 21 (4) Section 223(g)(1) of such Code is amend- 22 ed— 23 VerDate Sep 11 2014 03:49 Feb 19, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S153.IS S153 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 153 IS (A) by striking ‘‘subsections (b)(2) and 1 (c)(2)(A)’’ both places it appears and inserting 2 ‘‘subsection (b)(2)’’, and 3 (B) by striking ‘‘for ‘calendar year 2016’ ’’ 4 in subparagraph (B) and all that follows 5 through ‘‘ ‘calendar year 2003’.’’ and inserting 6 ‘‘ ‘calendar year 1997’ for ‘calendar year 2016’ 7 in subparagraph (A)(ii) thereof.’’. 8 (5) The heading of subparagraph (B) of section 9 223(b)(8) of such Code is amended by striking 10 ‘‘HIGH DEDUCTIBLE HEALTH PLAN’’. 11 (6) Section 26(b)(2)(S) of such Code is amend- 12 ed by striking ‘‘high deductible health plan’’. 13 (7) The heading of paragraph (3) of section 14 106(e) of such Code is amended by striking ‘‘HIGH 15 DEDUCTIBLE HEALTH PLAN’’. 16 (8) Clause (ii) of section 106(e)(5)(B) of such 17 Code is amended by striking ‘‘a high deductible 18 health plan’’ and inserting ‘‘a health plan’’. 19 (9) Paragraph (9) of section 408(d) of such 20 Code is amended— 21 (A) by striking ‘‘the high deductible health 22 plan covering’’ in subparagraph (C)(i)(I) and 23 inserting ‘‘health plan, insurance, or ministry 24 of’’, 25 VerDate Sep 11 2014 03:49 Feb 19, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S153.IS S153 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 153 IS (B) by striking ‘‘a high deductible health 1 plan’’ the first place it appears in subparagraph 2 (C)(ii)(II) and inserting ‘‘a health plan, insur- 3 ance, or ministry described in section 4 223(c)(1)’’, 5 (C) by striking ‘‘a high deductible health 6 plan’’ the second place it appears in subpara- 7 graph (C)(ii)(II) and inserting ‘‘any such plan, 8 insurance, or ministry’’, and 9 (D) by striking ‘‘HIGH DEDUCTIBLE 10 HEALTH PLAN’’ in the heading of subparagraph 11 (D). 12 (c) EFFECTIVE DATE.—The amendments made by 13 this section shall apply to taxable years beginning after 14 December 31, 2020. 15 SEC. 3. INCREASE IN HSA CONTRIBUTION LIMITS. 16 (a) IN GENERAL.—Paragraph (2) of section 223(b) 17 of the Internal Revenue Code of 1986 is amended— 18 (1) by striking ‘‘$2,250’’ in subparagraph (A) 19 and inserting ‘‘$10,800’’, and 20 (2) by striking ‘‘$4,500’’ in subparagraph (B) 21 and inserting ‘‘$29,500’’. 22 (b) COST-OF-LIVING ADJUSTMENT.—Paragraph (1) 23 of section 223(g) of the Internal Revenue Code of 1986, 24 as amended by section 2, is amended— 25 VerDate Sep 11 2014 03:49 Feb 19, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S153.IS S153 pbinns on DSKJLVW7X2PROD with BILLS 6 •S 153 IS (1) by striking ‘‘Each’’ and inserting ‘‘In the 1 case of a taxable year beginning after 2021, each’’, 2 and 3 (2) by striking ‘‘calendar year 1997’’ and in- 4 serting ‘‘calendar year 2020’’. 5 (c) EFFECTIVE DATE.—The amendments made by 6 this section shall apply to taxable years beginning after 7 December 31, 2020. 8 SEC. 4. PAYMENT OF HEALTH PLAN AND HEALTH INSUR- 9 ANCE PREMIUMS FROM HSA. 10 (a) IN GENERAL.—Paragraph (2) of section 223(d) 11 of the Internal Revenue Code of 1986 is amended— 12 (1) by striking subparagraph (B), 13 (2) by redesignating subparagraphs (C) and 14 (D) as subparagraphs (B) and (C), respectively, 15 (3) by striking ‘‘Subparagraph (B) shall not 16 apply to any expense for coverage under’’ in sub- 17 paragraph (B), as so redesignated, and inserting 18 ‘‘Subparagraph (A) shall not apply to any payment 19 for insurance other than’’, and 20 (4) in subparagraph (B), as so redesignated— 21 (A) by striking ‘‘or’’ at the end of clause 22 (iii), 23 (B) by striking the period at the end of 24 clause (iv) and inserting ‘‘, or’’, and 25 VerDate Sep 11 2014 03:49 Feb 19, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S153.IS S153 pbinns on DSKJLVW7X2PROD with BILLS 7 •S 153 IS (C) by adding at the end the following new 1 clause: 2 ‘‘(v) a health plan or health insurance 3 coverage described in subsection 4 (c)(1)(A).’’. 5 (b) EFFECTIVE DATE.—The amendments made by 6 this section shall apply to taxable years beginning after 7 December 31, 2020. 8 SEC. 5. TREATMENT OF MEDICAL CARE SERVICE ARRANGE- 9 MENTS. 10 (a) INCLUSION AS MEDICAL EXPENSES.—Paragraph 11 (2) of section 223(d) of the Internal Revenue Code of 12 1986, as amended by section 4, is further amended by 13 adding at the end the following new subparagraph: 14 ‘‘(D) INCLUSION OF MEDICAL CARE SERV- 15 ICE ARRANGEMENTS.—The term ‘qualified med- 16 ical expenses’ shall include— 17 ‘‘(i) periodic fees paid to a physician 18 for a defined set of medical services or for 19 the right to receive medical services on an 20 as-needed basis, and 21 ‘‘(ii) amounts prepaid for medical 22 services designed to screen for, diagnose, 23 cure, mitigate, treat, or prevent disease 24 and promote wellness.’’. 25 VerDate Sep 11 2014 03:49 Feb 19, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S153.IS S153 pbinns on DSKJLVW7X2PROD with BILLS 8 •S 153 IS (b) ARRANGEMENT NOT TO BE TREATED AS 1 HEALTH INSURANCE.—Subsection (c) of section 223 of 2 the Internal Revenue Code of 1986, as amended by section 3 2(b), is further amended by adding at the end the fol- 4 lowing new paragraph: 5 ‘‘(4) TREATMENT OF MEDICAL CARE SERVICE 6 ARRANGEMENTS.—An arrangement under which an 7 individual is provided medical services in exchange 8 for a fixed periodic fee or payment for such services 9 shall not be treated as a health plan, insurance, or 10 arrangement described in paragraph (1).’’. 11 (c) EFFECTIVE DATE.—The amendments made by 12 this section shall apply to taxable years beginning after 13 December 31, 2020. 14 SEC. 6. PERIODIC PROVIDER FEES TREATED AS MEDICAL 15 CARE. 16 (a) IN GENERAL.—Section 213(d) of the Internal 17 Revenue Code of 1986 is amended by adding at the end 18 the following new paragraph: 19 ‘‘(12) PERIODIC PROVIDER FEES.—Periodic 20 fees paid for a defined set of medical services pro- 21 vided on an as-needed basis shall be treated as 22 amounts paid for medical care.’’. 23 VerDate Sep 11 2014 03:49 Feb 19, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S153.IS S153 pbinns on DSKJLVW7X2PROD with BILLS 9 •S 153 IS (b) EFFECTIVE DATE.—The amendment made by 1 this section shall apply to taxable years beginning after 2 December 31, 2020. 3 SEC. 7. RESTORING LOWER PENALTY FOR NONQUALIFIED 4 DISTRIBUTIONS. 5 (a) IN GENERAL.—Section 223(e)(4)(A) of the Inter- 6 nal Revenue Code of 1986 is amended by striking ‘‘20 per- 7 cent’’ and inserting ‘‘10 percent’’. 8 (b) EFFECTIVE DATE.—The amendments made by 9 this section shall apply to distributions made in taxable 10 years beginning after December 31, 2020. 11 SEC. 8. TREATMENT OF HEALTH CARE SHARING MIN- 12 ISTRIES. 13 (a) INCLUSION AS MEDICAL EXPENSES.—Paragraph 14 (2) of section 223(d) of the Internal Revenue Code of 15 1986, as amended by sections 4 and 5, is further amended 16 by adding at the end the following new subparagraph: 17 ‘‘(E) INCLUSION OF HEALTH CARE SHAR- 18 ING MINISTRIES.—The term ‘qualified medical 19 expenses’ shall include amounts paid by a mem- 20 ber of a health care sharing ministry (as de- 21 fined in section 5000A(d)(2)(B)(ii)) for— 22 ‘‘(i) the sharing of medical expenses 23 among members, and 24 VerDate Sep 11 2014 03:49 Feb 19, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S153.IS S153 pbinns on DSKJLVW7X2PROD with BILLS 10 •S 153 IS ‘‘(ii) administrative fees of the min- 1 istry.’’. 2 (b) HEALTH CARE SHARING MINISTRY NOT TO BE 3 TREATED AS HEALTH INSURANCE.—Subsection (c) of 4 section 223 of the Internal Revenue Code of 1986, as 5 amended by sections 2 and 5, is further amended by add- 6 ing at the end the following new paragraph: 7 ‘‘(5) TREATMENT OF HEALTH CARE SHARING 8 MINISTRIES.—A health care sharing ministry (as de- 9 fined in section 5000A(d)(2)(B)(ii)) shall not be 10 treated as a health plan or insurance for purposes 11 of this title.’’. 12 (c) EFFECTIVE DATE.—The amendments made by 13 this section shall apply to taxable years beginning after 14 December 31, 2020. 15 Æ VerDate Sep 11 2014 03:49 Feb 19, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6301 E:\BILLS\S153.IS S153 pbinns on DSKJLVW7X2PROD with BILLS