Title: American Future Healthcare Act of 2019
Policy area: Taxation

Summary:
American Future Healthcare Act of 2019
This bill amends the Internal Revenue Code, with respect to health savings accounts (HSAs), to
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.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4651 Introduced in House (IH)]

<DOC>






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 Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``American Future Healthcare Act of 
2019''.

SEC. 2. REFORM OF HEALTH SAVINGS ACCOUNTS.

    (a) 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.''.
    (b) 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)''.
    (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.--'' and all 
        that follows through ``The term'' and inserting ``Qualified 
        medical expenses.--The term''.
    (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)'' 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)''.
    (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' 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.''.
    (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)'' and inserting 
                ``subsection (e)(5)''; and
                    (B) in clause (ii) by striking ``the sum of--'' and 
                all that follows and inserting ``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'' and inserting 
        ``calendar year 2014''.
            (6) Section 26(b)(2)(U) of such Code is amended by striking 
        ``section 223(f)(4)'' and inserting ``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)'' each place it appears and inserting 
        ``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))''; and
                    (B) by striking ``section 223(d)'' and inserting 
                ``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''; 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)'' and inserting ``223(e)(4)''.
            (11) Section 4973(g) of such Code is amended--
                    (A) by striking ``section 223(d)'' and inserting 
                ``section 223(c)'';
                    (B) in paragraph (2), by striking ``section 
                223(f)(2)'' and inserting ``section 223(e)(2)''; and
                    (C) by striking ``section 223(f)(3)'' and inserting 
                ``section 223(e)(3)''.
            (12) Section 4975 of such Code is amended--
                    (A) in subsection (c)(6)--
                            (i) by striking ``section 223(d)'' and 
                        inserting ``section 223(c)''; and
                            (ii) by striking ``section 223(e)(2)'' and 
                        inserting ``section 223(d)(2)''; and
                    (B) in subsection (e)(1)(E), by striking ``section 
                223(d)'' and inserting ``section 223(c)''.
            (13) Section 6693(a)(2)(C) of such Code is amended by 
        striking ``section 223(h)'' and inserting ``section 223(g)''.
    (h) 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.

    (a) 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),''.
    (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'' after ``into a health savings account''.
    (d) 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.

    (a) 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.''.
    (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' 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.
                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)'' and inserting ``, 
        (c)(2)(A), and (c)(4)(B)'', and
            (2) 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'.''.
    (d) 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.''.
    (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.

SEC. 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'' 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.
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