Personalized Care Act of 2021

I 117TH CONGRESS 1ST SESSION H. R. 725 To amend the Internal Revenue Code of 1986 to expand and improve health savings accounts, and for other purposes. IN THE HOUSE OF REPRESENTATIVES FEBRUARY 2, 2021 Mr. ROY (for himself, Mr. BIGGS, Mr. BANKS, Mr. MURPHY of North Caro- lina, Mr. BUDD, Mr. GREEN of Tennessee, Mr. ROUZER, Mr. HARRIS, Mr. HICE of Georgia, Mr. BISHOP of North Carolina, Mr. LAMBORN, Mr. KELLER, Mr. GAETZ, Mr. MEUSER, Mr. CURTIS, Ms. VAN DUYNE, Mr. GIBBS, Mr. SESSIONS, and Mr. TIFFANY) introduced the following bill; which was referred to the Committee on Ways and Means 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 VerDate Sep 11 2014 23:57 Feb 21, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H725.IH H725 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 725 IH SEC. 2. HEALTH SAVINGS ACCOUNT ELIGIBILITY. 1 (a) IN GENERAL.—Paragraph (1) of section 223(c) 2 of the Internal Revenue Code of 1986 is amended to read 3 as follows: 4 ‘‘(1) ELIGIBLE INDIVIDUAL.—The term ‘eligible 5 individual’ means, with respect to any month, any 6 individual if such individual is— 7 ‘‘(A) covered under— 8 ‘‘(i) a group or individual health plan, 9 ‘‘(ii) health insurance coverage, in- 10 cluding a short term limited duration plan 11 or medical indemnity plan, or 12 ‘‘(iii) a government plan, including 13 coverage under the Medicare program 14 under part A or part B of title XVIII of 15 the Social Security Act, the Medicaid pro- 16 gram under title XIX of such Act, the 17 CHIP program under title XXI of such 18 Act or a qualified CHIP look-alike pro- 19 gram (as defined in section 2107(g) of 20 such Act), medical coverage under chapter 21 55 of title 10, United States Code (includ- 22 ing coverage under the TRICARE pro- 23 gram), a health care program under chap- 24 ter 17 or 18 of title 38, United States 25 Code, as determined by the Secretary of 26 VerDate Sep 11 2014 23:57 Feb 21, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H725.IH H725 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 725 IH Veterans Affairs in coordination with the 1 Secretary of Health and Human Services 2 and the Secretary, a medical care program 3 of the Indian Health Service or a tribal or- 4 ganization, or coverage under chapter 89 5 of title 5, United States Code, or 6 ‘‘(B) a participant in a health care sharing 7 ministry (as defined in section 8 5000A(d)(2)(B)(ii)), 9 as of the 1st day of such month.’’. 10 (b) CONFORMING AMENDMENTS.— 11 (1) Subsection (c) of section 223 of such Code 12 is amended by striking paragraphs (2) and (3) and 13 by redesignating paragraphs (4) and (5) as para- 14 graphs (2) and (3), respectively. 15 (2) Paragraphs (2)(A) and (2)(B) of section 16 223(b) of such Code are each amended by striking 17 ‘‘a high deductible health plan’’ and inserting ‘‘a 18 health plan, insurance, or ministry described in sub- 19 section (c)(1)’’. 20 (3) Paragraph (8)(A)(ii) of section 223(b) of 21 such Code is amended by striking ‘‘high deductible 22 health plan’’ and inserting ‘‘health plan, insurance, 23 or ministry described in subsection (c)(1)’’. 24 VerDate Sep 11 2014 23:57 Feb 21, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H725.IH H725 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 725 IH (4) Section 223(g)(1) of such Code is amend- 1 ed— 2 (A) by striking ‘‘subsections (b)(2) and 3 (c)(2)(A)’’ both places it appears and inserting 4 ‘‘subsection (b)(2)’’, and 5 (B) by striking ‘‘for ‘calendar year 2016’ ’’ 6 in subparagraph (B) and all that follows 7 through ‘‘ ‘calendar year 2003’.’’ and inserting 8 ‘‘ ‘calendar year 1997’ for ‘calendar year 2016’ 9 in subparagraph (A)(ii) thereof.’’. 10 (5) The heading of subparagraph (B) of section 11 223(b)(8) of such Code is amended by striking 12 ‘‘HIGH DEDUCTIBLE HEALTH PLAN’’. 13 (6) Section 26(b)(2)(S) of such Code is amend- 14 ed by striking ‘‘high deductible health plan’’. 15 (7) The heading of paragraph (3) of section 16 106(e) of such Code is amended by striking ‘‘HIGH 17 DEDUCTIBLE HEALTH PLAN’’. 18 (8) Clause (ii) of section 106(e)(5)(B) of such 19 Code is amended by striking ‘‘a high deductible 20 health plan’’ and inserting ‘‘a health plan’’. 21 (9) Paragraph (9) of section 408(d) of such 22 Code is amended— 23 (A) by striking ‘‘the high deductible health 24 plan covering’’ in subparagraph (C)(i)(I) and 25 VerDate Sep 11 2014 23:57 Feb 21, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H725.IH H725 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 725 IH inserting ‘‘health plan, insurance, or ministry 1 of’’, 2 (B) by striking ‘‘a high deductible health 3 plan’’ the first place it appears in subparagraph 4 (C)(ii)(II) and inserting ‘‘a health plan, insur- 5 ance, or ministry described in section 6 223(c)(1)’’, 7 (C) by striking ‘‘a high deductible health 8 plan’’ the second place it appears in subpara- 9 graph (C)(ii)(II) and inserting ‘‘any such plan, 10 insurance, or ministry’’, and 11 (D) by striking ‘‘HIGH DEDUCTIBLE 12 HEALTH PLAN’’ in the heading of subparagraph 13 (D). 14 (c) EFFECTIVE DATE.—The amendments made by 15 this section shall apply to taxable years beginning after 16 December 31, 2020. 17 SEC. 3. INCREASE IN HSA CONTRIBUTION LIMITS. 18 (a) IN GENERAL.—Paragraph (2) of section 223(b) 19 of the Internal Revenue Code of 1986 is amended— 20 (1) by striking ‘‘$2,250’’ in subparagraph (A) 21 and inserting ‘‘$10,800’’, and 22 (2) by striking ‘‘$4,500’’ in subparagraph (B) 23 and inserting ‘‘$29,500’’. 24 VerDate Sep 11 2014 23:57 Feb 21, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H725.IH H725 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 725 IH (b) COST-OF-LIVING ADJUSTMENT.—Paragraph (1) 1 of section 223(g) of the Internal Revenue Code of 1986, 2 as amended by section 2, is amended— 3 (1) by striking ‘‘Each’’ and inserting ‘‘In the 4 case of a taxable year beginning after 2021, each’’, 5 and 6 (2) by striking ‘‘calendar year 1997’’ and in- 7 serting ‘‘calendar year 2020’’. 8 (c) EFFECTIVE DATE.—The amendments made by 9 this section shall apply to taxable years beginning after 10 December 31, 2020. 11 SEC. 4. PAYMENT OF HEALTH PLAN AND HEALTH INSUR- 12 ANCE PREMIUMS FROM HSA. 13 (a) IN GENERAL.—Paragraph (2) of section 223(d) 14 of the Internal Revenue Code of 1986 is amended— 15 (1) by striking subparagraph (B), 16 (2) by redesignating subparagraphs (C) and 17 (D) as subparagraphs (B) and (C), respectively, 18 (3) by striking ‘‘Subparagraph (B) shall not 19 apply to any expense for coverage under’’ in sub- 20 paragraph (B), as so redesignated, and inserting 21 ‘‘Subparagraph (A) shall not apply to any payment 22 for insurance other than’’, and 23 (4) in subparagraph (B), as so redesignated— 24 VerDate Sep 11 2014 23:57 Feb 21, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H725.IH H725 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 725 IH (A) by striking ‘‘or’’ at the end of clause 1 (iii), 2 (B) by striking the period at the end of 3 clause (iv) and inserting ‘‘, or’’, and 4 (C) by adding at the end the following new 5 clause: 6 ‘‘(v) a health plan or health insurance 7 coverage described in subsection 8 (c)(1)(A).’’. 9 (b) EFFECTIVE DATE.—The amendments made by 10 this section shall apply to taxable years beginning after 11 December 31, 2020. 12 SEC. 5. TREATMENT OF MEDICAL CARE SERVICE ARRANGE- 13 MENTS. 14 (a) INCLUSION AS MEDICAL EXPENSES.—Paragraph 15 (2) of section 223(d) of the Internal Revenue Code of 16 1986, as amended by section 4, is further amended by 17 adding at the end the following new subparagraph: 18 ‘‘(D) INCLUSION OF MEDICAL CARE SERV- 19 ICE ARRANGEMENTS.—The term ‘qualified med- 20 ical expenses’ shall include— 21 ‘‘(i) periodic fees paid to a physician 22 for a defined set of medical services or for 23 the right to receive medical services on an 24 as-needed basis, and 25 VerDate Sep 11 2014 23:57 Feb 21, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H725.IH H725 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 725 IH ‘‘(ii) amounts prepaid for medical 1 services designed to screen for, diagnose, 2 cure, mitigate, treat, or prevent disease 3 and promote wellness.’’. 4 (b) ARRANGEMENT NOT TO BE TREATED AS 5 HEALTH INSURANCE.—Subsection (c) of section 223 of 6 the Internal Revenue Code of 1986, as amended by section 7 2(b), is further amended by adding at the end the fol- 8 lowing new paragraph: 9 ‘‘(4) TREATMENT OF MEDICAL CARE SERVICE 10 ARRANGEMENTS.—An arrangement under which an 11 individual is provided medical services in exchange 12 for a fixed periodic fee or payment for such services 13 shall not be treated as a health plan, insurance, or 14 arrangement described in paragraph (1).’’. 15 (c) EFFECTIVE DATE.—The amendments made by 16 this section shall apply to taxable years beginning after 17 December 31, 2020. 18 SEC. 6. PERIODIC PROVIDER FEES TREATED AS MEDICAL 19 CARE. 20 (a) IN GENERAL.—Section 213(d) of the Internal 21 Revenue Code of 1986 is amended by adding at the end 22 the following new paragraph: 23 ‘‘(12) PERIODIC PROVIDER FEES.—Periodic 24 fees paid for a defined set of medical services pro- 25 VerDate Sep 11 2014 23:57 Feb 21, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H725.IH H725 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 725 IH vided on an as-needed basis shall be treated as 1 amounts paid for medical care.’’. 2 (b) EFFECTIVE DATE.—The amendment made by 3 this section shall apply to taxable years beginning after 4 December 31, 2020. 5 SEC. 7. RESTORING LOWER PENALTY FOR NONQUALIFIED 6 DISTRIBUTIONS. 7 (a) IN GENERAL.—Section 223(e)(4)(A) of the Inter- 8 nal Revenue Code of 1986 is amended by striking ‘‘20 per- 9 cent’’ and inserting ‘‘10 percent’’. 10 (b) EFFECTIVE DATE.—The amendments made by 11 this section shall apply to distributions made in taxable 12 years beginning after December 31, 2020. 13 SEC. 8. TREATMENT OF HEALTH CARE SHARING MIN- 14 ISTRIES. 15 (a) INCLUSION AS MEDICAL EXPENSES.—Paragraph 16 (2) of section 223(d) of the Internal Revenue Code of 17 1986, as amended by sections 4 and 5, is further amended 18 by adding at the end the following new subparagraph: 19 ‘‘(E) INCLUSION OF HEALTH CARE SHAR- 20 ING MINISTRIES.—The term ‘qualified medical 21 expenses’ shall include amounts paid by a mem- 22 ber of a health care sharing ministry (as de- 23 fined in section 5000A(d)(2)(B)(ii)) for— 24 VerDate Sep 11 2014 23:57 Feb 21, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H725.IH H725 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 725 IH ‘‘(i) the sharing of medical expenses 1 among members, and 2 ‘‘(ii) administrative fees of the min- 3 istry.’’. 4 (b) HEALTH CARE SHARING MINISTRY NOT TO BE 5 TREATED AS HEALTH INSURANCE.—Subsection (c) of 6 section 223 of the Internal Revenue Code of 1986, as 7 amended by sections 2 and 5, is further amended by add- 8 ing at the end the following new paragraph: 9 ‘‘(5) TREATMENT OF HEALTH CARE SHARING 10 MINISTRIES.—A health care sharing ministry (as de- 11 fined in section 5000A(d)(2)(B)(ii)) shall not be 12 treated as a health plan or insurance for purposes 13 of this title.’’. 14 (c) EFFECTIVE DATE.—The amendments made by 15 this section shall apply to taxable years beginning after 16 December 31, 2020. 17 Æ VerDate Sep 11 2014 23:57 Feb 21, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6301 E:\BILLS\H725.IH H725 pbinns on DSKJLVW7X2PROD with BILLS