Section 1 Short title
This Act may be cited as the “American Future Healthcare Act of 2019”.
American Future Healthcare Act of 2019
A BILL
To amend the Internal Revenue Code of 1986 to expand health savings accounts, and for other purposes.
Sec. 2 Reform of Health Savings Accounts
Repeal of high deductible health plan requirement— Section 223(a) of the Internal Revenue Code of 1986 is amended to read as follows:
“(a) Deduction allowed—In the case of an individual, there shall be allowed as a deduction for a taxable year an amount equal to the aggregate amount paid in cash during such taxable year by or on behalf of such individual to a health savings account of such individual.”
Increase in deductible HSA contribution limitations— Section 223(b)(1) of such Code is amended by striking “the sum of the monthly” and all that follows through “eligible individual” and inserting “$10,000 ($20,000 in the case of a joint return)”.
Medicare eligible individuals eligible To contribute to HSA— Section 223(b) of such Code is amended by striking paragraph (7).
Purchase of health insurance— Section 223(d)(2) of such Code is amended—
by striking subparagraphs (B) and (C), and
by striking “Qualified medical expenses.—” and all that follows through “The term” and inserting “Qualified medical expenses.—The term”.
Cost-of-Living adjustment for catchup contributions— Section 223(f)(1) of such Code (as redesignated by subsection (g)(3)) is amended by striking “Each dollar amount in subsections (b)(2) and (c)(2)(A)” and inserting “In the case of a taxable year beginning after December 31, 2019, each dollar amount in paragraphs (1) and (2) of subsection (b)”.
Cost-of-Living adjustment indexed to CPI medical care component— Section 223(f) (as so redesignated) is amended by adding at the end the following new paragraph:
“(3) CPI medical care component
“(A) In general—For purposes of paragraph (1), the cost-of-living adjustment determined under section 1(f)(3) for the calendar year shall be determined by substituting “CPI medical care component” for “CPI”.
“(B) CPI medical care component—For purposes of subparagraph (A), the term CPI medical care component means the medical care component for the Consumer Price Index for All Urban Consumers published by the Department of Labor.”
Conforming amendments—
Section 223(b) of such Code is amended by striking paragraphs (2), (5), and (8) and by redesignating paragraphs (3), (4), and (6) as paragraphs (2), (3), and (4), respectively.
Section 223(b)(3) of such Code (as redesignated by paragraph (1)) is amended by striking the last sentence.
Section 223 of such Code is amended by striking subsection (c) and redesignating subsections (d) through (h) as subsections (c) through (g), respectively.
Section 223(c)(1)(A) of such Code (as redesignated by paragraph (3)) is amended—
by striking “subsection (f)(5)” and inserting “subsection (e)(5)”; and
in clause (ii) by striking “the sum of—” and all that follows and inserting “the dollar amount in effect under subsection (b)(1).”.
Section 223(f)(1) (as redesignated by paragraph (3)) is amended by striking “calendar year 2003” and inserting “calendar year 2014”.
Section 26(b)(2)(U) of such Code is amended by striking “section 223(f)(4)” and inserting “section 223(e)(4)”.
Sections 35(g)(3), 220(f)(5)(A), 848(e)(1)(v), 4973(a)(5), and 6051(a)(12) of such Code are each amended by striking “section 223(d)” each place it appears and inserting “section 223(c)”.
Section 106(d)(1) of such Code is amended—
by striking “who is an eligible individual (as defined in section 223(c)(1))”; and
by striking “section 223(d)” and inserting “section 223(c)”.
Section 408(d)(9) of such Code is amended—
in subparagraph (A) by striking “who is an eligible individual (as defined in section 223(c)) and”; and
in subparagraph (C) by striking “computed on the basis of the type of coverage under the high deductible health plan covering the individual at the time of the qualified HSA funding distribution”.
Section 877A(g)(6) of such Code is amended by striking “223(f)(4)” and inserting “223(e)(4)”.
Section 4973(g) of such Code is amended—
by striking “section 223(d)” and inserting “section 223(c)”;
in paragraph (2), by striking “section 223(f)(2)” and inserting “section 223(e)(2)”; and
by striking “section 223(f)(3)” and inserting “section 223(e)(3)”.
Section 4975 of such Code is amended—
in subsection (c)(6)—
by striking “section 223(d)” and inserting “section 223(c)”; and
by striking “section 223(e)(2)” and inserting “section 223(d)(2)”; and
in subsection (e)(1)(E), by striking “section 223(d)” and inserting “section 223(c)”.
Section 6693(a)(2)(C) of such Code is amended by striking “section 223(h)” and inserting “section 223(g)”.
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2018.
Sec. 3 HSA Rollover to Medicare Advantage MSA
In general— Section 138(b)(2) of the Internal Revenue Code of 1986 is amended by striking “or” at the end of subparagraph (A), by adding “or” at the end of subparagraph (C), and by adding at the end the following new subparagraph:
“(C) an HSA rollover contribution described in subsection (d)(5),”
HSA rollover contribution— Section 138(c) of such Code is amended by adding at the end the following new paragraph:
“(5) Rollover contribution—An amount is described in this paragraph as a rollover contribution if it meets the requirement of subparagraphs (A) and (B).
“(A) In general—The requirements of this subparagraph are met in the case of an amount paid or distributed from a health savings to the account beneficiary to the extent the amount is received is paid into a Medicare Advantage MSA of such beneficiary not later than the 60th day after the day on which the beneficiary receives the payment or distribution.
“(B) Limitation—This paragraph shall not apply to any amount described in subparagraph (A) received by an individual from a health savings account if, at any time during the 1-year period ending on the day of such receipt, such individual received any other amount described in subparagraph (A) from a health savings account which was not includible in the individual’s gross income because of the application of section 223(e)(5)(A).”
Conforming amendment— Section 223(e)(5)(A) of such Code, as amended by section 2, is amended by inserting “or Medicare Advantage MSA” after “into a health savings account”.
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2018.
Sec. 4 Treatment of direct primary care service arrangement fees as medical expense
In general— Section 223(c)(2)(C) of the Internal Revenue Code of 1986, as amended by the preceding provisions of this Act, is amended by striking “or” at the end of clause (iii), by striking the period at the end of clause (iv) and inserting “, or”, and by adding at the end the following new clause:
“(v) any direct primary care service arrangement.”
Direct primary care service arrangement— Section 223(c) of such Code, as amended by the preceding provisions of this Act, is amended by redesignating paragraph (4) as paragraph (5) and by inserting after paragraph (3) the following new paragraph:
“(4) Direct primary care service arrangement—For purposes of this paragraph—
“(A) In general—The term direct primary care service arrangement means, with respect to any individual, an arrangement under which such individual is provided medical care (as defined in section 213(d)) consisting solely of primary care services (as defined in section 1833(x)(2)(B) of the Social Security Act) provided by primary care practitioners (as defined in section 1833(x)(2)(A) of the Social Security Act, determined without regard to clause (ii) thereof), if the sole compensation for such care is a fixed periodic fee.
“(B) Limitation—With respect to any individual for any month, such term shall not include any arrangement if the aggregate fees for all direct primary care service arrangements (determined without regard to this subclause) with respect to such individual for such month exceed $150 (twice such dollar amount in the case of an individual with any direct primary care service arrangement (as so determined) that covers more than one individual).
“(C) Certain services specifically excluded from treatment as primary care services—For purposes of this paragraph, the term primary care services shall not include—
“(i) procedures that require the use of general anesthesia,
“(ii) prescription drugs (other than vaccines), and
“(iii) laboratory services not typically administered in an ambulatory primary care setting.”
Inflation adjustment— Section 223(g)(1) of such Code is amended—
by striking “and (c)(2)(A)” and inserting “, (c)(2)(A), and (c)(4)(B)”, and
in subparagraph (B), by striking “clause (ii)” and inserting “clauses (ii) and (iii)” in clause (i), by striking “and” at the end of clause (i), by striking the period at the end of clause (ii) and inserting “, and”, and by inserting after clause (ii) the following new clause:
“(iii) in the case of the dollar amount in subsection (c)(4)(B) for taxable years beginning in calendar years after 2019, “calendar year 2018”.”
Reporting of direct primary care service arrangement fees on W–2— Section 6051(a) of such Code is amended by striking “and” at the end of paragraph (16), by striking the period at the end of paragraph (17) and inserting “, and”, and by inserting after paragraph (17) the following new paragraph:
“(18) in the case of a direct primary care service arrangement (as defined in section 223(c)(4)) which is provided in connection with employment, the aggregate fees for such arrangement for such employee.”
Effective date— The amendments made by this subsection shall apply to months beginning after December 31, 2018, in taxable years ending after such date.
Sec. 5 Allowing certain individuals with alternative health coverage to choose to opt out of the Medicare part A benefit
In general— Any individual described in subsection (c) who is otherwise entitled to benefits under part A of title XVIII of the Social Security Act may elect (in such form and manner as may be specified by the Commissioner of Social Security, in consultation with the Secretary of Health and Human Services) to opt out of such entitlement. Notwithstanding any other provision of law, in the case of an individual who makes such an election, such individual—
may (in such form and manner as may be specified by the Commissioner, in consultation with the Secretary) subsequently choose to end such election and opt back into such entitlement (in accordance with a process determined by the Commissioner, in consultation with the Secretary) without, subject to subsection (b), being subject to any penalty;
shall not be required to opt out of benefits under title II of such Act as a condition for making such election; and
shall not be required to repay any amount paid under such part A for items and services furnished prior to making such election.
Notification of termination of qualifying alternative health coverage required—
Notification— In the case of an individual who makes an election under subsection (a) and whose enrollment in qualifying alternative health coverage is subsequently terminated, such individual shall notify the Secretary of Health and Human Services of such termination not later than 60 days after the date of such termination.
Late enrollment penalty— If an individual required to notify the Secretary under paragraph (1) fails to provide such notification within the period specified under such paragraph and subsequently chooses to end the election made by such individual under subsection (a) and opt back into benefits under part A of title XVIII of the Social Security Act, such individual shall be subject to a late enrollment penalty (as determined by the Secretary) in a manner and amount similar to an individual enrolled under such part A pursuant to section 1818 of such Act (42 U.S.C. 1395i–2).
Individual described—
In general— For purposes of this section, an individual described in this subsection is an individual who demonstrates (in accordance with a process determined by the Commissioner, in consultation with the Secretary) that the individual is enrolled under qualifying alternative health coverage.
Qualifying alternative health coverage— For purposes of this section, the term qualifying alternative health coverage includes a group health plan or health insurance coverage offered in the group or individual market (as such terms are defined in section 2791 of the Public Health Service Act (42 U.S.C. 300gg–91), or other health coverage specified by the Commissioner, in consultation with the Secretary, that provides at least benefits comparable to benefits provided under part A of title XVIII of the Social Security Act.