I 116TH CONGRESS 1ST SESSION H. R. 4651 To amend the Internal Revenue Code of 1986 to expand health savings accounts, and for other purposes. IN THE HOUSE OF REPRESENTATIVES OCTOBER 11, 2019 Mr. KING of Iowa 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 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 ‘‘American Future 4 Healthcare Act of 2019’’. 5 SEC. 2. REFORM OF HEALTH SAVINGS ACCOUNTS. 6 (a) REPEAL OF HIGH DEDUCTIBLE HEALTH PLAN 7 REQUIREMENT.—Section 223(a) of the Internal Revenue 8 Code of 1986 is amended to read as follows: 9 VerDate Sep 11 2014 01:08 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4651.IH H4651 kjohnson on DSK79L0C42 with BILLS 2 •HR 4651 IH ‘‘(a) DEDUCTION ALLOWED.—In the case of an indi- 1 vidual, there shall be allowed as a deduction for a taxable 2 year an amount equal to the aggregate amount paid in 3 cash during such taxable year by or on behalf of such indi- 4 vidual to a health savings account of such individual.’’. 5 (b) INCREASE IN DEDUCTIBLE HSA CONTRIBUTION 6 LIMITATIONS.—Section 223(b)(1) of such Code is amend- 7 ed by striking ‘‘the sum of the monthly’’ and all that fol- 8 lows through ‘‘eligible individual’’ and inserting ‘‘$10,000 9 ($20,000 in the case of a joint return)’’. 10 (c) MEDICARE ELIGIBLE INDIVIDUALS ELIGIBLE TO 11 CONTRIBUTE TO HSA.—Section 223(b) of such Code is 12 amended by striking paragraph (7). 13 (d) PURCHASE OF HEALTH INSURANCE.—Section 14 223(d)(2) of such Code is amended— 15 (1) by striking subparagraphs (B) and (C), and 16 (2) by striking ‘‘QUALIFIED MEDICAL EX- 17 PENSES.—’’ and all that follows through ‘‘The term’’ 18 and inserting ‘‘QUALIFIED MEDICAL EXPENSES.— 19 The term’’. 20 (e) COST-OF-LIVING ADJUSTMENT FOR CATCHUP 21 CONTRIBUTIONS.—Section 223(f)(1) of such Code (as re- 22 designated by subsection (g)(3)) is amended by striking 23 ‘‘Each dollar amount in subsections (b)(2) and (c)(2)(A)’’ 24 and inserting ‘‘In the case of a taxable year beginning 25 VerDate Sep 11 2014 01:08 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4651.IH H4651 kjohnson on DSK79L0C42 with BILLS 3 •HR 4651 IH after December 31, 2019, each dollar amount in para- 1 graphs (1) and (2) of subsection (b)’’. 2 (f) COST-OF-LIVING ADJUSTMENT INDEXED TO CPI 3 MEDICAL CARE COMPONENT.—Section 223(f) (as so re- 4 designated) is amended by adding at the end the following 5 new paragraph: 6 ‘‘(3) CPI MEDICAL CARE COMPONENT.— 7 ‘‘(A) IN GENERAL.—For purposes of para- 8 graph (1), the cost-of-living adjustment deter- 9 mined under section 1(f)(3) for the calendar 10 year shall be determined by substituting ‘CPI 11 medical care component’ for ‘CPI’. 12 ‘‘(B) CPI MEDICAL CARE COMPONENT.— 13 For purposes of subparagraph (A), the term 14 ‘CPI medical care component’ means the med- 15 ical care component for the Consumer Price 16 Index for All Urban Consumers published by 17 the Department of Labor.’’. 18 (g) CONFORMING AMENDMENTS.— 19 (1) Section 223(b) of such Code is amended by 20 striking paragraphs (2), (5), and (8) and by redesig- 21 nating paragraphs (3), (4), and (6) as paragraphs 22 (2), (3), and (4), respectively. 23 VerDate Sep 11 2014 01:08 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4651.IH H4651 kjohnson on DSK79L0C42 with BILLS 4 •HR 4651 IH (2) Section 223(b)(3) of such Code (as redesig- 1 nated by paragraph (1)) is amended by striking the 2 last sentence. 3 (3) Section 223 of such Code is amended by 4 striking subsection (c) and redesignating subsections 5 (d) through (h) as subsections (c) through (g), re- 6 spectively. 7 (4) Section 223(c)(1)(A) of such Code (as re- 8 designated by paragraph (3)) is amended— 9 (A) by striking ‘‘subsection (f)(5)’’ and in- 10 serting ‘‘subsection (e)(5)’’; and 11 (B) in clause (ii) by striking ‘‘the sum of— 12 ’’ and all that follows and inserting ‘‘the dollar 13 amount in effect under subsection (b)(1).’’. 14 (5) Section 223(f)(1) (as redesignated by para- 15 graph (3)) is amended by striking ‘‘calendar year 16 2003’’ and inserting ‘‘calendar year 2014’’. 17 (6) Section 26(b)(2)(U) of such Code is amend- 18 ed by striking ‘‘section 223(f)(4)’’ and inserting 19 ‘‘section 223(e)(4)’’. 20 (7) Sections 35(g)(3), 220(f)(5)(A), 21 848(e)(1)(v), 4973(a)(5), and 6051(a)(12) of such 22 Code are each amended by striking ‘‘section 223(d)’’ 23 each place it appears and inserting ‘‘section 223(c)’’. 24 VerDate Sep 11 2014 01:08 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4651.IH H4651 kjohnson on DSK79L0C42 with BILLS 5 •HR 4651 IH (8) Section 106(d)(1) of such Code is amend- 1 ed— 2 (A) by striking ‘‘who is an eligible indi- 3 vidual (as defined in section 223(c)(1))’’; and 4 (B) by striking ‘‘section 223(d)’’ and in- 5 serting ‘‘section 223(c)’’. 6 (9) Section 408(d)(9) of such Code is amend- 7 ed— 8 (A) in subparagraph (A) by striking ‘‘who 9 is an eligible individual (as defined in section 10 223(c)) and’’; and 11 (B) in subparagraph (C) by striking ‘‘com- 12 puted on the basis of the type of coverage under 13 the high deductible health plan covering the in- 14 dividual at the time of the qualified HSA fund- 15 ing distribution’’. 16 (10) Section 877A(g)(6) of such Code is 17 amended by striking ‘‘223(f)(4)’’ and inserting 18 ‘‘223(e)(4)’’. 19 (11) Section 4973(g) of such Code is amend- 20 ed— 21 (A) by striking ‘‘section 223(d)’’ and in- 22 serting ‘‘section 223(c)’’; 23 VerDate Sep 11 2014 01:08 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4651.IH H4651 kjohnson on DSK79L0C42 with BILLS 6 •HR 4651 IH (B) in paragraph (2), by striking ‘‘section 1 223(f)(2)’’ and inserting ‘‘section 223(e)(2)’’; 2 and 3 (C) by striking ‘‘section 223(f)(3)’’ and in- 4 serting ‘‘section 223(e)(3)’’. 5 (12) Section 4975 of such Code is amended— 6 (A) in subsection (c)(6)— 7 (i) by striking ‘‘section 223(d)’’ and 8 inserting ‘‘section 223(c)’’; and 9 (ii) by striking ‘‘section 223(e)(2)’’ 10 and inserting ‘‘section 223(d)(2)’’; and 11 (B) in subsection (e)(1)(E), by striking 12 ‘‘section 223(d)’’ and inserting ‘‘section 13 223(c)’’. 14 (13) Section 6693(a)(2)(C) of such Code is 15 amended by striking ‘‘section 223(h)’’ and inserting 16 ‘‘section 223(g)’’. 17 (h) EFFECTIVE DATE.—The amendments made by 18 this section shall apply to taxable years beginning after 19 December 31, 2018. 20 SEC. 3. HSA ROLLOVER TO MEDICARE ADVANTAGE MSA. 21 (a) IN GENERAL.—Section 138(b)(2) of the Internal 22 Revenue Code of 1986 is amended by striking ‘‘or’’ at the 23 end of subparagraph (A), by adding ‘‘or’’ at the end of 24 VerDate Sep 11 2014 01:08 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4651.IH H4651 kjohnson on DSK79L0C42 with BILLS 7 •HR 4651 IH subparagraph (C), and by adding at the end the following 1 new subparagraph: 2 ‘‘(C) an HSA rollover contribution de- 3 scribed in subsection (d)(5),’’. 4 (b) HSA ROLLOVER CONTRIBUTION.—Section 5 138(c) of such Code is amended by adding at the end the 6 following new paragraph: 7 ‘‘(5) ROLLOVER CONTRIBUTION.—An amount is 8 described in this paragraph as a rollover contribu- 9 tion if it meets the requirement of subparagraphs 10 (A) and (B). 11 ‘‘(A) IN GENERAL.—The requirements of 12 this subparagraph are met in the case of an 13 amount paid or distributed from a health sav- 14 ings to the account beneficiary to the extent the 15 amount is received is paid into a Medicare Ad- 16 vantage MSA of such beneficiary not later than 17 the 60th day after the day on which the bene- 18 ficiary receives the payment or distribution. 19 ‘‘(B) LIMITATION.—This paragraph shall 20 not apply to any amount described in subpara- 21 graph (A) received by an individual from a 22 health savings account if, at any time during 23 the 1-year period ending on the day of such re- 24 ceipt, such individual received any other amount 25 VerDate Sep 11 2014 01:08 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H4651.IH H4651 kjohnson on DSK79L0C42 with BILLS 8 •HR 4651 IH described in subparagraph (A) from a health 1 savings account which was not includible in the 2 individual’s gross income because of the appli- 3 cation of section 223(e)(5)(A).’’. 4 (c) CONFORMING AMENDMENT.—Section 5 223(e)(5)(A) of such Code, as amended by section 2, is 6 amended by inserting ‘‘or Medicare Advantage MSA’’ 7 after ‘‘into a health savings account’’. 8 (d) EFFECTIVE DATE.—The amendments made by 9 this section shall apply to taxable years beginning after 10 December 31, 2018. 11 SEC. 4. TREATMENT OF DIRECT PRIMARY CARE SERVICE 12 ARRANGEMENT FEES AS MEDICAL EXPENSE. 13 (a) IN GENERAL.—Section 223(c)(2)(C) of the Inter- 14 nal Revenue Code of 1986, as amended by the preceding 15 provisions of this Act, is amended by striking ‘‘or’’ at the 16 end of clause (iii), by striking the period at the end of 17 clause (iv) and inserting ‘‘, or’’, and by adding at the end 18 the following new clause: 19 ‘‘(v) any direct primary care service arrangement.’’. 20 (b) DIRECT PRIMARY CARE SERVICE ARRANGE- 21 MENT.—Section 223(c) of such Code, as amended by the 22 preceding provisions of this Act, is amended by redesig- 23 nating paragraph (4) as paragraph (5) and by inserting 24 after paragraph (3) the following new paragraph: 25 VerDate Sep 11 2014 01:08 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H4651.IH H4651 kjohnson on DSK79L0C42 with BILLS 9 •HR 4651 IH ‘‘(4) DIRECT PRIMARY CARE SERVICE AR- 1 RANGEMENT.—For purposes of this paragraph— 2 ‘‘(A) IN GENERAL.—The term ‘direct pri- 3 mary care service arrangement’ means, with re- 4 spect to any individual, an arrangement under 5 which such individual is provided medical care 6 (as defined in section 213(d)) consisting solely 7 of primary care services (as defined in section 8 1833(x)(2)(B) of the Social Security Act) pro- 9 vided by primary care practitioners (as defined 10 in section 1833(x)(2)(A) of the Social Security 11 Act, determined without regard to clause (ii) 12 thereof), if the sole compensation for such care 13 is a fixed periodic fee. 14 ‘‘(B) LIMITATION.—With respect to any 15 individual for any month, such term shall not 16 include any arrangement if the aggregate fees 17 for all direct primary care service arrangements 18 (determined without regard to this subclause) 19 with respect to such individual for such month 20 exceed $150 (twice such dollar amount in the 21 case of an individual with any direct primary 22 care service arrangement (as so determined) 23 that covers more than one individual). 24 VerDate Sep 11 2014 01:08 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H4651.IH H4651 kjohnson on DSK79L0C42 with BILLS 10 •HR 4651 IH ‘‘(C) CERTAIN SERVICES SPECIFICALLY 1 EXCLUDED FROM TREATMENT AS PRIMARY 2 CARE SERVICES.—For purposes of this para- 3 graph, the term ‘primary care services’ shall not 4 include— 5 ‘‘(i) procedures that require the use of 6 general anesthesia, 7 ‘‘(ii) prescription drugs (other than 8 vaccines), and 9 ‘‘(iii) laboratory services not typically 10 administered in an ambulatory primary 11 care setting. 12 The Secretary, after consultation with the Sec- 13 retary of Health and Human Services, shall 14 issue regulations or other guidance regarding 15 the application of this subparagraph.’’. 16 (c) INFLATION ADJUSTMENT.—Section 223(g)(1) of 17 such Code is amended— 18 (1) by striking ‘‘and (c)(2)(A)’’ and inserting ‘‘, 19 (c)(2)(A), and (c)(4)(B)’’, and 20 (2) in subparagraph (B), by striking ‘‘clause 21 (ii)’’ and inserting ‘‘clauses (ii) and (iii)’’ in clause 22 (i), by striking ‘‘and’’ at the end of clause (i), by 23 striking the period at the end of clause (ii) and in- 24 VerDate Sep 11 2014 01:08 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H4651.IH H4651 kjohnson on DSK79L0C42 with BILLS 11 •HR 4651 IH serting ‘‘, and’’, and by inserting after clause (ii) the 1 following new clause: 2 ‘‘(iii) in the case of the dollar amount 3 in subsection (c)(4)(B) for taxable years 4 beginning in calendar years after 2019, 5 ‘calendar year 2018’.’’. 6 (d) REPORTING OF DIRECT PRIMARY CARE SERVICE 7 ARRANGEMENT FEES ON W–2.—Section 6051(a) of such 8 Code is amended by striking ‘‘and’’ at the end of para- 9 graph (16), by striking the period at the end of paragraph 10 (17) and inserting ‘‘, and’’, and by inserting after para- 11 graph (17) the following new paragraph: 12 ‘‘(18) in the case of a direct primary care serv- 13 ice arrangement (as defined in section 223(c)(4)) 14 which is provided in connection with employment, 15 the aggregate fees for such arrangement for such 16 employee.’’. 17 (e) EFFECTIVE DATE.—The amendments made by 18 this subsection shall apply to months beginning after De- 19 cember 31, 2018, in taxable years ending after such date. 20 VerDate Sep 11 2014 01:08 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H4651.IH H4651 kjohnson on DSK79L0C42 with BILLS 12 •HR 4651 IH SEC. 5. ALLOWING CERTAIN INDIVIDUALS WITH ALTER- 1 NATIVE HEALTH COVERAGE TO CHOOSE TO 2 OPT OUT OF THE MEDICARE PART A BEN- 3 EFIT. 4 (a) IN GENERAL.—Any individual described in sub- 5 section (c) who is otherwise entitled to benefits under part 6 A of title XVIII of the Social Security Act may elect (in 7 such form and manner as may be specified by the Commis- 8 sioner of Social Security, in consultation with the Sec- 9 retary of Health and Human Services) to opt out of such 10 entitlement. Notwithstanding any other provision of law, 11 in the case of an individual who makes such an election, 12 such individual— 13 (1) may (in such form and manner as may be 14 specified by the Commissioner, in consultation with 15 the Secretary) subsequently choose to end such elec- 16 tion and opt back into such entitlement (in accord- 17 ance with a process determined by the Commis- 18 sioner, in consultation with the Secretary) without, 19 subject to subsection (b), being subject to any pen- 20 alty; 21 (2) shall not be required to opt out of benefits 22 under title II of such Act as a condition for making 23 such election; and 24 VerDate Sep 11 2014 01:08 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H4651.IH H4651 kjohnson on DSK79L0C42 with BILLS 13 •HR 4651 IH (3) shall not be required to repay any amount 1 paid under such part A for items and services fur- 2 nished prior to making such election. 3 (b) NOTIFICATION [Text truncated for display. 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