H.R.2114 - Health Access and Flexibility Act of 2003108th Congress (2003-2004)
|Sponsor:||Rep. Burgess, Michael C. [R-TX-26] (Introduced 05/15/2003)|
|Committees:||House - Ways and Means; Energy and Commerce|
|Latest Action:||House - 05/21/2003 Referred to the Subcommittee on Health. (All Actions)|
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Text: H.R.2114 — 108th Congress (2003-2004)All Information (Except Text)
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Introduced in House (05/15/2003)
[Congressional Bills 108th Congress] [From the U.S. Government Printing Office] [H.R. 2114 Introduced in House (IH)] 108th CONGRESS 1st Session H. R. 2114 To amend the Internal Revenue Code of 1986 to expand medical savings accounts and to amend title XIX of the Social Security Act to provide for medical freedom accounts under the Medicaid and State children's health insurance programs. _______________________________________________________________________ IN THE HOUSE OF REPRESENTATIVES May 15, 2003 Mr. Burgess (for himself and Mr. Scott of Georgia) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned _______________________________________________________________________ A BILL To amend the Internal Revenue Code of 1986 to expand medical savings accounts and to amend title XIX of the Social Security Act to provide for medical freedom accounts under the Medicaid and State children's health insurance programs. 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 ``Health Access and Flexibility Act of 2003''. SEC. 2. EXPANSION OF MEDICAL SAVINGS ACCOUNTS. (a) Availability Not Limited to Accounts for Employees of Small Employers and Self-Employed Individuals.-- (1) In general.--Subparagraph (A) of section 220(c)(1) of the Internal Revenue Code of 1986 (relating to eligible individual) is amended to read as follows: ``(A) In general.--The term `eligible individual' means, with respect to any month, any individual if-- ``(i) such individual is covered under a high deductible health plan as of the 1st day of such month, and ``(ii) such individual is not, while covered under a high deductible health plan, covered under any health plan-- ``(I) which is not a high deductible health plan, and ``(II) which provides coverage for any benefit which is covered under the high deductible health plan.''. (2) Repeal of Limitations on Number of Medical Savings Accounts.-- (A) In general.--Subsections (i) and (j) of section 220 are hereby repealed. (B) Conforming amendments.-- (i) Paragraph (1) of section 220(c) of such Code is amended by striking subparagraph (D). (ii) Section 138 of such Code is amended by striking subsection (f). (3) Conforming amendments.-- (A) Section 220(c)(1) of such Code is amended by striking subparagraph (C). (B) Section 220(c) of such Code is amended by striking paragraph (4) (defining small employer) and by redesignating paragraph (5) as paragraph (4). (C) Section 220(b) of such Code is amended by striking paragraph (4) (relating to deduction limited by compensation) and by redesignating paragraphs (5), (6), and (7) as paragraphs (4), (5), and (6), respectively. (b) Reduction of Permitted Deductibles Under High Deductible Health Plans.-- (1) In general.--Subparagraph (A) of section 220(c)(2) of such Code (defining high deductible health plan) is amended-- (A) in clause (i) by striking ``$1,500'' and inserting ``$1,000'', and (B) in clause (ii) by striking ``$3,000'' and inserting ``$2,000''. (2) Cost of living adjustment.--Subsection (g) of section 220 of such Code is amended by striking ``each dollar amount in subsection (c)(2) shall be increased'' and inserting ``the $2,250, $4,500, $3,000, and $5,500 amounts in subsection (c)(2)(A) shall each be increased''. (c) Increase in Amount of Deduction Allowed for Contributions to Medical Savings Accounts.-- (1) In general.--Paragraph (2) of section 220(b) of such Code is amended to read as follows: ``(2) Monthly limitation.--The monthly limitation for any month is the amount equal to \1/12\ of the annual deductible under the type of coverage such individual has for such month.'' (2) Conforming amendment.--Clause (ii) of section 220(d)(1)(A) of such Code is amended by striking ``75 percent of''. (d) Both Employers and Employees May Contribute to Medical Savings Accounts.--Paragraph (4) of section 220(b) of such Code (as redesignated by subsection (b)(2)(C)) is amended to read as follows: ``(4) Coordination with exclusion for employer contributions.--The limitation which would (but for this paragraph) apply under this subsection to the taxpayer for any taxable year shall be reduced (but not below zero) by the amount which would (but for section 106(b)) be includible in the taxpayer's gross income for such taxable year.''. (e) Rollovers to Archer MSAs From Health Flexible Spending Arrangements..-- (1) In general.--Subsection (d) of section 220 of the Internal Revenue Code of 1986 (defining Archer MSA) is amended by redesignating paragraph (4) as paragraph (5) and by inserting after paragraph (3) the following new paragraph: ``(4) Special rule for rollovers from health flexible spending accounts.--A rollover contribution described in this paragraph is a transfer from a flexible spending account (as defined in section 125(h)) to the extent the amount received is paid into an Archer MSA for the benefit of such holder not later than the 60th day after the day on which the holder receives the payment or distribution.''. (2) Rollover of unused health benefits in cafeteria plans and flexible spending arrangements.-- (A) In general.--Section 125 of such Code (relating to cafeteria plans) is amended by redesignating subsections (h) and (i) as subsections (i) and (j), respectively, and by inserting after subsection (g) the following: ``(h) Rollover to Archer Medical Savings Accounts of Certain Unused Health Benefits.-- ``(1) In general.--For purposes of this title, a plan or other arrangement shall not fail to be treated as a cafeteria plan solely because qualified benefits under such plan include a health flexible spending arrangement under which, with respect to any plan year, health benefits which are unused at the end of such year may be transferred to an Archer MSA of the employee. ``(2) Tax treatment of unused health benefits.--Amounts transferred under paragraph (1) to an Archer MSA shall not be includible in gross income for such taxable year and shall not be treated as a contribution for purposes of section 220(a). ``(3) Health flexible spending arrangement.--For purposes of this subsection, the term `health flexible spending arrangement' means a flexible spending arrangement (as defined in section 106(c)) that is a qualified benefit and only permits reimbursement for expenses for medical care (as defined in section 213(d)(1) (without regard to subparagraphs (C) and (D) thereof). ``(4) Unused health benefits.--For purposes of this subsection, the term `unused health benefits' means the excess of-- ``(A) the maximum amount of reimbursement allowable for a plan year under a health flexible spending arrangement, over ``(B) the actual amount of reimbursement for such year under such arrangement.''. (B) Conforming amendment.--Section 220(d)(1)(A) of such Code is amended by inserting ``described in paragraph (4) or'' after ``contribution''. (f) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2003. SEC. 3. MEDICAL FREEDOM ACCOUNTS UNDER THE MEDICAID PROGRAM AND UNDER THE STATE CHILDREN'S HEALTH INSURANCE PROGRAM (SCHIP). (a) In General.--Title XIX of the Social Security Act is amended-- (1) by redesignating section 1935 as section 1936; and (2) by inserting after section 1934 the following new section: ``medical freedom accounts ``Sec. 1935. (a) Authority.-- ``(1) In general.--Notwithstanding any other provision of this title, a State may amend its State plan under this title (including in a Statewide waiver under section 1115 relating to this title) to provide in accordance with this section for the provision of alternative benefits consistent with subsection (c) for eligible population groups in one or more geographic areas of the State specified by the State. An amendment under the previous sentence is referred to in this section as a `State plan amendment'. ``(2) Approval.--The Secretary shall not approve a State plan amendment under paragraph (1) unless the amendment incorporates the following: ``(A) Creating patient awareness of the high cost of medical care. ``(B) Providing incentives to patients to seek preventive care services. ``(C) Reduction in inappropriate use of health care services. ``(D) Enabling patients to take responsibility for health outcomes. ``(b) Eligible Populations Groups.--The State plan amendment under this section shall specify the eligible population groups. ``(c) Alternative Benefits.-- ``(1) In general.--The alternative benefits provided under this section shall consist of at least-- ``(A) coverage for medical expenses in a year after a catastrophic deductible has been met; and ``(B) contribution into a medical freedom account. ``(2) Overriding existing benefits.--The provisions of this title relating to mandated benefits or cost-sharing or comparability of benefits (including sections 1902(a)(10) and 1916) shall not apply to an individual or family being provided alternative benefits under this section. ``(3) Treatment as medical assistance.--Payments for alternative benefits under this section (including contributions into a medical freedom account) shall be treated as medical assistance for purposes of section 1903(a). ``(d) Medical Freedom Account.-- ``(1) In general.--For purposes of this section, the term `medical freedom account' means an account that meets the requirements of this subsection. ``(2) Contributions.-- ``(A) In general.--No contribution may be made into a medical freedom account except-- ``(i) contributions by the State under this title; and ``(ii) contributions by an employer, which may not exceed, in the case of an individual otherwise eligible for benefits under this title, $1,000 per account per year. ``(B) Limitation.--In no case may a contribution be made into a medical freedom account if the balance in such account exceeds $3,500, in the case of an account for an individual, or $5,500, in the case of an account for a family. ``(3) Use.-- ``(A) In general.--Subject to the succeeding provisions of this paragraph, amounts in a medical freedom account may be used only for the payment of medical care (as defined by section 213(d) of the Internal Revenue Code of 1986), and may only be used for expenses in the year in which the contribution was made. The State plan amendment shall provide for a method whereby withdrawals may be made from the account for such purposes using an electronic benefits transfer (EBT) system. ``(B) Rollover permitted.-- ``(i) In general.--Subject to clause (ii), amounts in a medical freedom account at the end of a year may be rolled over and used in the following year. ``(ii) Preventive care may be required for rollover for medicaid beneficiaries.--In the case of an account holder who is eligible for benefits under this title in December of a year, amounts in the medical freedom account at the end of the year may be rolled over and used in the following year only apply if the account holder meets such preventive care requirements as is provided under the State plan amendment. ``(C) Maintenance of medical freedom account after becoming ineligible for public benefit.-- Notwithstanding any other provision of law, if an account holder of a medical freedom account becomes ineligible for benefits under this title because of an increase in income or assets, no additional contribution shall be made into the account under paragraph (2)(A)(i) but the account shall remain available to the account holder for withdrawals under the same terms and conditions as if the account holder remained eligible for such benefits, except that the amounts in the account shall be available for the purchase of health insurance coverage. An account holder of a medical freedom account, after becoming so ineligible, is not required to purchase high-deductible or other insurance as a condition of maintaining or using the account. ``(4) Administration.--A State shall coordinate administration of medical freedom accounts through the use of a third party administrator. ``(5) Treatment.--Amounts in a medical freedom account shall not be counted as income or assets for purposes of determining eligibility for benefits under this title. ``(6) Unauthorized withdrawals.--A State may establish procedures-- ``(A) to penalize or remove an individual from the medical freedom account program based on nonqualified withdrawals by the individual from such an account; and ``(B) to recoup costs that derive from such nonqualified withdrawals.''. (b) Application Under the State Children's Health Insurance Program (SCHIP).--Section 2107(e)(1) of the Social Security Act (42 U.S.C. 1397gg(e)(1)) is amended by adding at the end the following new subparagraph: ``(E) Section 1935 (relating to medical freedom accounts).''. (c) Exclusion From Gross Income for Employer Contributions to Medical Freedom Accounts.--Section 106 of the Internal Revenue Code of 1986 (relating to contributions by employer to accident and health plans) is amended by adding at the end the following new subsection: ``(d) Contributions to Medical Freedom Accounts.-- ``(1) In general.--In the case of an employee who is an eligible individual, amounts contributed by such employee's employer to any medical freedom account of such employee shall be treated as employer-provided coverage for medical expenses under an accident or health plan to the extent such amounts do not exceed the limitation under section 1935(d)(2) of the Social Security Act which is applicable to such employee for such taxable year. ``(2) No constructive receipt.--No amount shall be included in the gross income of any employee solely because the employee may choose between the contributions referred to in paragraph (1) and employer contributions to another health plan of the employer. ``(3) Employer medical freedom account contribution required to be shown on return.--Every individual required to file a return under section 6012 for the taxable year shall include on such return the aggregate amount contributed by employers to the medical freedom accounts of such individual or such individual's spouse for such taxable year. ``(4) Contributions not part of cobra coverage.--Paragraph (1) shall not apply for purposes of section 4980B. ``(5) Definitions.--For purposes of this subsection-- ``(A) Eligible individual.--The term `eligible individual' means an individual for whose benefit a medical freedom account is established under section 1935 of the Social Security Act. ``(B) Medical freedom account.--The term `medical freedom account' has the meaning given to such term by section 1935 of the Social Security Act.''. <all>