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
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.
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.