Bill Details
HR.1026 - 119th Congress
Status
Latest action
2025-02-05 - Referred to the House Committee on Ways and Means.
Introduced Date
2025-02-05
Policy Area
Taxation
Committees
View committees (1)
Cosponsors
View cosponsors (8)
8
0
0
AI Summary This summary was generated by AI from the bill text. AI can get information wrong.
This bill would make it easier for people to use direct primary care and still keep their health savings account, or HSA, benefits. Under the bill, a direct primary care arrangement would not count as a health plan for HSA eligibility if it is limited to primary care and is paid for with a fixed regular fee. The bill also treats the fees paid for these arrangements as medical expenses, which can matter for tax purposes. It sets limits on the monthly fee amount, leaves out some more serious medical services, and requires certain employer-provided arrangements to be reported on W-2 forms. The changes would start after December 31, 2025.
- A direct primary care arrangement would not stop someone from being eligible for an HSA, as long as it only covers primary care and is paid through a set recurring fee.
- The bill limits these arrangements to no more than $150 a month per person, or $300 a month if the arrangement covers more than one person.
- These arrangements would not include services such as surgery that needs general anesthesia, prescription drugs other than vaccines, or lab services that are not usually part of a normal primary care office.
- Fees for direct primary care would count as medical expenses, and employer-provided fees would have to be listed on an employee’s W-2 form. The fee limit would also be adjusted over time for inflation.
Official Summaries
No summaries available
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1026 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 1026
To amend the Internal Revenue Code of 1986 to allow individuals with
direct primary care service arrangements to remain eligible individuals
for purposes of health savings accounts, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 5, 2025
Mr. Smucker (for himself, Ms. Tenney, Mr. Schneider, Mr. Panetta, Mr.
Crenshaw, and Ms. Schrier) 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 allow individuals with
direct primary care service arrangements to remain eligible individuals
for purposes of 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 ``Primary Care Enhancement Act of
2025''.
SEC. 2. TREATMENT OF DIRECT PRIMARY CARE SERVICE ARRANGEMENTS.
(a) In General.--Section 223(c)(1) of the Internal Revenue Code of
1986 is amended by adding at the end the following new subparagraph:
``(E) Treatment of direct primary care service
arrangements.--
``(i) In general.--A direct primary care
service arrangement shall not be treated as a
health plan for purposes of subparagraph
(A)(ii).
``(ii) Direct primary care service
arrangement.--For purposes of this paragraph--
``(I) 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
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.
``(II) 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).
``(iii) 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 clause.''.
(b) Direct Primary Care Service Arrangement Fees Treated as Medical
Expenses.--Section 223(d)(2)(C) of such Code 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.''.
(c) Inflation Adjustment.--Section 223(g)(1) of such Code is
amended--
(1) by inserting ``, (c)(1)(D)(ii)(II),'' after ``(b)(2)''
each place it appears, and
(2) in subparagraph (B), by inserting ``and (iii)'' after
``clause (ii)'' 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)(1)(D)(ii)(II) for taxable years
beginning in calendar years after 2026,
`calendar year 2025'.''.
(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)(1)(D)(ii)) which is
provided in connection with employment, the aggregate fees for
such arrangement for such employee.''.
(e) Effective Date.--The amendments made by this section shall
apply to months beginning after December 31, 2025, in taxable years
ending after such date.
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