Personalized Care Act of 2023

To amend the Internal Revenue Code of 1986 to expand and improve health savings accounts, and for other purposes. 1. Short title This Act may be cited as the Personalized Care Act of 2023 2. Health savings account eligibility (a) In general Paragraph (1) of section 223(c) (1) Eligible individual The term eligible individual (A) covered under— (i) a group or individual health plan, (ii) health insurance coverage, including a short term limited duration plan or medical indemnity plan, or (iii) a government plan, including coverage under the Medicare program under part A or part B of title XVIII of the Social Security Act, the Medicaid program under title XIX of such Act, the CHIP program under title XXI of such Act or a qualified CHIP look-alike program (as defined in section 2107(g) of such Act), medical coverage under chapter 55 chapter 89 (B) a participant in a health care sharing ministry (as defined in section 5000A(d)(2)(B)(ii) without regard to subclause (IV) thereof), as of the 1st day of such month. . (b) Conforming amendments (1) Subsection (c) of section 223 of such Code is amended by striking paragraphs (2) and (3) and by redesignating paragraphs (4) and (5) as paragraphs (2) and (3), respectively. (2) Paragraphs (2)(A) and (2)(B) of section 223(b) of such Code are each amended by striking a high deductible health plan a health plan, insurance, or ministry described in subsection (c)(1) (3) Paragraph (8)(A)(ii) of section 223(b) of such Code is amended by striking high deductible health plan health plan, insurance, or ministry described in subsection (c)(1) (4) Section 223(g)(1) of such Code is amended— (A) by striking subsections (b)(2) and (c)(2)(A) subsection (b)(2) (B) by striking for calendar year 2016 calendar year 2003 calendar year 1997 calendar year 2016 (5) The heading of subparagraph (B) of section 223(b)(8) of such Code is amended by striking high deductible health plan (6) Section 26(b)(2)(S) of such Code is amended by striking high deductible health plan (7) The heading of paragraph (3) of section 106(e) of such Code is amended by striking high deductible health plan (8) Clause (ii) of section 106(e)(5)(B) of such Code is amended by striking a high deductible health plan a health plan (9) Paragraph (9) of section 408(d) of such Code is amended— (A) by striking the high deductible health plan covering health plan, insurance, or ministry of (B) by striking a high deductible health plan a health plan, insurance, or ministry described in section 223(c)(1) (C) by striking a high deductible health plan any such plan, insurance, or ministry (D) by striking high deductible health plan (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023. 3. Increase in HSA contribution limits (a) In general Paragraph (2) of section 223(b) (1) by striking $2,250 $10,800 (2) by striking $4,500 $29,500 (b) Cost-of-Living adjustment Paragraph (1) of section 223(g) (1) by striking Each In the case of a taxable year beginning after 2024, each (2) by striking calendar year 1997 calendar year 2023 (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023. 4. Payment of health plan and health insurance premiums from HSA (a) In general Paragraph (2) of section 223(d) (1) by striking subparagraph (B), (2) by redesignating subparagraphs (C) and (D) as subparagraphs (B) and (C), respectively, (3) by striking Subparagraph (B) shall not apply to any expense for coverage under Subparagraph (A) shall not apply to any payment for insurance other than (4) in subparagraph (B), as so redesignated— (A) by striking or (B) by striking the period at the end of clause (iv) and inserting , or (C) by adding at the end the following new clause: (v) a health plan or health insurance coverage described in subsection (c)(1)(A). . (b) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023. 5. Treatment of medical care service arrangements (a) Inclusion as medical expenses Paragraph (2) of section 223(d) (D) Inclusion of medical care service arrangements The term qualified medical expenses (i) periodic fees paid to a physician for a defined set of medical services or for the right to receive medical services on an as-needed basis, and (ii) amounts prepaid for medical services designed to screen for, diagnose, cure, mitigate, treat, or prevent disease and promote wellness. . (b) Arrangement not To be treated as health insurance Subsection (c) of section 223 (4) Treatment of medical care service arrangements An arrangement under which an individual is provided medical services in exchange for a fixed periodic fee or payment for such services shall not be treated as a health plan, insurance, or arrangement described in paragraph (1). . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023. 6. Periodic provider fees treated as medical care (a) In general Section 213(d) (12) Periodic provider fees Periodic fees paid for a defined set of medical services provided on an as-needed basis shall be treated as amounts paid for medical care. . (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2023. 7. Restoring lower penalty for nonqualified distributions (a) In general Section 223(e)(4)(A) 20 percent 10 percent (b) Effective date The amendments made by this section shall apply to distributions made in taxable years beginning after December 31, 2023. 8. Treatment of health care sharing ministries (a) Inclusion as medical expenses Paragraph (2) of section 223(d) (E) Inclusion of health care sharing ministries The term qualified medical expenses (i) the sharing of medical expenses among members, and (ii) administrative fees of the ministry. . (b) Health care sharing ministry not To be treated as health insurance Subsection (c) of section 223 (5) Treatment of health care sharing ministries A health care sharing ministry (as defined in section 5000A(d)(2)(B)(ii) without regard to subclause (IV) thereof) shall not be treated as a health plan or insurance for purposes of this title. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023. 9. Health care sharing ministry fees treated as medical care (a) In general Section 213(d) (13) Health care sharing ministries Amounts paid for membership in a health care sharing ministry (as defined in section 5000A(d)(2)(B)(ii) without regard to subclause (IV) thereof) shall be treated as amounts paid for medical care. . (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2023.

Summary: Personalized Care Act of 2023 This bill revises provisions relating to health savings accounts (HSAs), including to redefine eligible individual for HSA purposes to allow increased participation in HSAs, increase the limit on contributions to HSAs, permit the payment of health insurance premiums from HSAs, include within the definition of qualified medical expenses periodic fees paid for medical services and amounts paid by a member of a health care sharing ministry, treat periodic provider fees as deductible medical expenses, and lower the 20% penalty for nonqualified distributions from HSAs to 10%.