American Future Healthcare Act of 2019

To amend the Internal Revenue Code of 1986 to expand health savings accounts, and for other purposes. 1. Short title This Act may be cited as the American Future Healthcare Act of 2019 2. Reform of Health Savings Accounts (a) Repeal of high deductible health plan requirement Section 223(a) (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. . (b) Increase in deductible HSA contribution limitations Section 223(b)(1) of such Code is amended by striking the sum of the monthly eligible individual $10,000 ($20,000 in the case of a joint return) (c) Medicare eligible individuals eligible To contribute to HSA Section 223(b) of such Code is amended by striking paragraph (7). (d) Purchase of health insurance Section 223(d)(2) of such Code is amended— (1) by striking subparagraphs (B) and (C), and (2) by striking Qualified medical expenses The term Qualified medical expenses (e) 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) In the case of a taxable year beginning after December 31, 2019, each dollar amount in paragraphs (1) and (2) of subsection (b) (f) 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 CPI (B) CPI medical care component For purposes of subparagraph (A), the term CPI medical care component . (g) Conforming amendments (1) 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. (2) Section 223(b)(3) of such Code (as redesignated by paragraph (1)) is amended by striking the last sentence. (3) Section 223 of such Code is amended by striking subsection (c) and redesignating subsections (d) through (h) as subsections (c) through (g), respectively. (4) Section 223(c)(1)(A) of such Code (as redesignated by paragraph (3)) is amended— (A) by striking subsection (f)(5) subsection (e)(5) (B) in clause (ii) by striking the sum of— the dollar amount in effect under subsection (b)(1). (5) Section 223(f)(1) (as redesignated by paragraph (3)) is amended by striking calendar year 2003 calendar year 2014 (6) Section 26(b)(2)(U) of such Code is amended by striking section 223(f)(4) section 223(e)(4) (7) 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) section 223(c) (8) Section 106(d)(1) of such Code is amended— (A) by striking who is an eligible individual (as defined in section 223(c)(1)) (B) by striking section 223(d) section 223(c) (9) Section 408(d)(9) of such Code is amended— (A) in subparagraph (A) by striking who is an eligible individual (as defined in section 223(c)) and (B) 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 (10) Section 877A(g)(6) of such Code is amended by striking 223(f)(4) 223(e)(4) (11) Section 4973(g) of such Code is amended— (A) by striking section 223(d) section 223(c) (B) in paragraph (2), by striking section 223(f)(2) section 223(e)(2) (C) by striking section 223(f)(3) section 223(e)(3) (12) Section 4975 of such Code is amended— (A) in subsection (c)(6)— (i) by striking section 223(d) section 223(c) (ii) by striking section 223(e)(2) section 223(d)(2) (B) in subsection (e)(1)(E), by striking section 223(d) section 223(c) (13) Section 6693(a)(2)(C) of such Code is amended by striking section 223(h) section 223(g) (h) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2018. 3. HSA Rollover to Medicare Advantage MSA (a) In general Section 138(b)(2) or or (C) an HSA rollover contribution described in subsection (d)(5), . (b) 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). . (c) Conforming amendment Section 223(e)(5)(A) of such Code, as amended by section 2, is amended by inserting or Medicare Advantage MSA into a health savings account (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2018. 4. Treatment of direct primary care service arrangement fees as medical expense (a) In general Section 223(c)(2)(C) or , or (v) any direct primary care service arrangement. . (b) 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 (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 (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. The Secretary, after consultation with the Secretary of Health and Human Services, shall issue regulations or other guidance regarding the application of this subparagraph. . (c) Inflation adjustment Section 223(g)(1) of such Code is amended— (1) by striking and (c)(2)(A) , (c)(2)(A), and (c)(4)(B) (2) in subparagraph (B), by striking clause (ii) clauses (ii) and (iii) and , and (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 . (d) Reporting of direct primary care service arrangement fees on W–2 Section 6051(a) of such Code is amended by striking and , and (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. . (e) Effective date The amendments made by this subsection shall apply to months beginning after December 31, 2018, in taxable years ending after such date. 5. Allowing certain individuals with alternative health coverage to choose to opt out of the Medicare part A benefit (a) 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— (1) 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; (2) shall not be required to opt out of benefits under title II of such Act as a condition for making such election; and (3) shall not be required to repay any amount paid under such part A for items and services furnished prior to making such election. (b) Notification of termination of qualifying alternative health coverage required (1) 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. (2) 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 (c) Individual described (1) 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. (2) Qualifying alternative health coverage For purposes of this section, the term qualifying alternative health coverage 42 U.S.C. 300gg–91

Summary: American Future Healthcare Act of 2019 This bill amends the Internal Revenue Code, with respect to health savings accounts (HSAs), to repeal the requirement that an individual making a tax deductible contribution to an HSA be covered by a high deductible health care plan; increase the maximum HSA contribution level; allow Medicare eligible individuals to contribute to an HSA; allow HSAs to be used to purchase health insurance; provide a cost-of-living adjustment for the limits on additional contributions for individuals 55 or older (catch-up contributions); require the cost-of-living adjustments to be indexed to the CPI medical care component (the medical care component for the Consumer Price Index for All Urban Consumers published by the Department of Labor); allow a rollover of HSA amounts to a Medicare Advantage Medical Savings Account (MSA); and treat direct primary care service arrangement fees as deductible medical expenses. This bill also allows an individual with alternative health coverage to opt out of Medicare hospital services benefits without also having to opt out of Old Age, Survivors, and Disability Insurance benefits and without having to repay Medicare hospital services benefits already received.