Primary Care Enhancement Act of 2023

Subjects: Taxation, Employee benefits and pensions, Health care costs and insurance, Income tax deductions, Inflation and prices, Tax administration and collection, taxpayers

Summary:  <p><strong>Primary Care Enhancement Act of 2023</strong></p> <p>This bill allows a medical expense tax deduction for direct primary care service arrangements and provides that participation in such arrangements does not disqualify patients from making tax deductible contributions to health savings accounts.</p>

<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 628 Introduced in Senate (IS)]

&lt;DOC&gt;






118th CONGRESS
  1st Session
                                 S. 628

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 
             account contributions, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 2, 2023

 Mr. Cassidy (for himself, Mrs. Shaheen, Mr. Scott of South Carolina, 
and Mr. Kelly) 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 arrangements as medical care, to provide 
  that such arrangements do not disqualify deductible health savings 
             account contributions, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Primary Care Enhancement Act of 
2023''.

SEC. 2. TREATMENT OF DIRECT PRIMARY CARE SERVICE ARRANGEMENTS.

    (a) Amount Treated as Medical Care.--
            (1) In general.--Section 213(d)(1) of the Internal Revenue 
        Code of 1986 is amended by striking ``or'' at the end of 
        subparagraph (C), by striking the period at the end of 
        subparagraph (D) and inserting ``, or'', and by inserting after 
        subparagraph (D) the following new subparagraph:
                    ``(E) for direct primary care service 
                arrangements.''.
            (2) Limitation.--Section 213(d)(1) of such Code, as amended 
        by paragraph (1), is further amended by adding at the end the 
        following: ``In the case of a direct care primary service 
        arrangement, only eligible fee amounts (as defined in paragraph 
        (13)) shall be taken into account under subparagraph (E).''.
            (3) Definitions.--Section 213(d) of such Code is amended by 
        inserting after paragraph (11) the following new paragraphs:
            ``(12) Direct primary care service arrangement.--
                    ``(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 paragraph (1), 
                determined without regard to subparagraph (E) thereof) 
                consisting solely of primary care services 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) 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, and
                            ``(ii) laboratory services not typically 
                        administered in an ambulatory primary care 
                        setting.
                The Secretary, after consultation with the Secretary of 
                Health and Human Services, shall issue regulations or 
                other guidance regarding the application of this 
                subparagraph.
            ``(13) Eligible fee amount.--
                    ``(A) In general.--The term `eligible fee amount' 
                means, with respect to any individual for any month, 
                the amount of fixed periodic fees paid for a direct 
                care primary service arrangement, to the extent that 
                the aggregate fees for all direct primary care service 
                arrangements with respect to such individual for such 
                month do not exceed $150 (twice such dollar amount in 
                the case of an individual with any direct primary care 
                service arrangement that covers more than one 
                individual).
                    ``(B) Indexing.--In the case of any taxable year 
                beginning in a calendar year after 2024, the $150 
                amount contained in subparagraph (A) shall be increased 
                by an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which such taxable year begins 
                        determined by substituting `calendar year 2023' 
                        for `calendar year 2016' in subparagraph 
                        (A)(ii) thereof.
                If any increase under the preceding sentence is not a 
                multiple of $10, such increase shall be rounded to the 
                nearest multiple of $10.''.
    (b) Health Savings Accounts.--Section 223(c) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(6) Treatment of direct primary care service 
        arrangements.--A direct care primary service arrangement (as 
        defined in section 213(d)(12))--
                    ``(A) shall not be treated as a health plan for 
                purposes of paragraph (1)(A)(ii), and
                    ``(B) shall not be treated as insurance for 
                purposes of subsection (d)(2)(B).''.
    (c) Reporting of Direct Primary Care Service Arrangement Fees on W-
2.--Section 6051(a) of the Internal Revenue Code of 1986 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 213(d)(12)) which is 
        provided in connection with employment, the aggregate fees for 
        such arrangement for such employee.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to months beginning after December 31, 2023, in taxable years 
ending after such date.
                                 &lt;all&gt;
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