House Ways & Means Committee Issues Report on Promoting High-Value Health Care Through Flexibility for High Deductible Health Plans Act
Excerpts of the report follow:
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
The bill H.R. 6301, as reported by the
B. Background and Need for Legislation
According to a survey of 52 health insurers conducted by
HSA account holders are diverse. According to
In addition, a JCT analysis found that of the tax returns that took an HSA deduction in 2015, 71 percent of the returns reported an income of
Most critically, research has consistently found that such coverage, which empowers individuals and families to be more engaged health care consumers, is capable of significantly reducing health care costs. As
H.R. 6301 allows plans to modernize the benefit in a way that promotes high-value care on the front end, without upending the underlying economic incentives. HDHPs will still empower individuals to shop around, unleashing the powers of choice and competition to lower costs and increase quality.
C. Legislative History
Background
H.R. 6301 was introduced on
Committee action
Committee hearings
The policy issues associated with Health Savings Accounts (HSAs) and need for legislative response were discussed at three Ways and Means hearings during the 114th and 115th
Full Committee Hearing on the Tax Treatment of Health Care (
Subcommittee on Health Member
Subcommittee on Health Hearing on Rising Health Insurance Premiums Under the Affordable Care Act (
Subcommittee on Health Hearing on Lowering Costs and Expanding Access to Health Care through Consumer-Directed Health Plans (
II. EXPLANATION OF THE BILL
A. First Dollar Coverage Flexibility for High Deductible Health Plans
PRESENT LAW
Health savings accounts
An individual may establish a health savings account ("HSA") only if the individual is covered under a plan that meets the requirements for a high deductible health plan, as described below. In general, HSAs provide tax-favored treatment for current medical expenses as well as the ability to save on a tax-favored basis for future medical expenses. In general, an HSA is a tax-exempt trust or custodial account created exclusively to pay for the qualified medical expenses of the account holder and his or her spouse and dependents.
Within limits,1 contributions to an HSA made by or on behalf of an eligible individual are deductible by the individual. Contributions to an HSA are excludible from income and employment taxes if made by the employer. Earnings in HSAs are not taxable. Distributions from an HSA for qualified medical expenses are not includible in gross income. Distributions from an HSA that are not used for qualified medical expenses are includible in gross income and are subject to an additional tax of 20 percent. The 20-percent additional tax does not apply if the distribution is made after death, disability, or the individual attains the age of Medicare eligibility (age 65).
1For 2018, the basic limit on annual contributions that can be made to an HSA is
High deductible health plans
A high deductible health plan is a health plan that has an annual deductible which is not less than
2Sec. 223(c)(2).
3Sec. 223(g).
An individual who is covered under a high deductible health plan is eligible to establish an HSA, provided that while such individual is covered under the high deductible health plan, the individual is not covered under any health plan that (1) is not a high deductible health plan and (2) provides coverage for any benefit (subject to certain exceptions) covered under the high deductible health plan.4
4Sec. 223(c)(1).
Various types of coverage are disregarded for this purpose, including coverage of any benefit provided by permitted insurance, coverage (whether through insurance or otherwise) for accidents, disability, dental care, vision care, or long- term care, as well as certain limited coverage through health flexible savings accounts.5 Permitted insurance means insurance under which substantially all of the coverage provided relates to liabilities incurred under workers' compensation laws, tort liabilities, liabilities relating to ownership or use of property, or such other similar liabilities as specified by the Secretary under regulations. Permitted insurance also means insurance for a specified disease or illness, and insurance paying a fixed amount per day (or other period) of hospitalization.6
5Sec. 223(c)(1)(B).
6Sec. 223(c)(3).
Under a safe harbor, a high deductible health plan is permitted to provide coverage for preventive care (within the meaning of section 1861 of the Social Security Act, except as otherwise provided by the Secretary) before satisfaction of the minimum deductible.7
7Sec. 223(c)(2)(C).
8Notice 2004-23, 2004-15 I.R.B. 725 (
REASONS FOR CHANGE
The Committee believes that the provision would add value to high deductible health plans by giving such plans the flexibility to provide benefits (beyond preventive care services) up to a specified dollar cap before satisfying the plan's deductible.
EXPLANATION OF PROVISION
The provision provides that a high deductible health plan is permitted to provide certain coverage ("specified services") up to a dollar threshold for each plan year without satisfaction of the plan's minimum deductible. Thus, under the provision, a health plan will not fail to be treated as a high deductible health plan merely by reason of failing to require a deductible for specified services up to a dollar threshold for each plan year. The dollar threshold is
EFFECTIVE DATE
The provision applies to plan years beginning after
III. VOTES OF THE COMMITTEE
In compliance with clause 3(b) of rule XIII of the
H.R. 6301 was ordered favorably reported to the
(TABLE OMITTED)
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d) of rule XIII of the Rules of the
The bill, as reported, is estimated to have the following effect on Federal fiscal year budget receipts for the period 2019-2028:
(TABLE OMITTED)
Pursuant to clause 8 of rule XIII of the Rules of the
B.
In compliance with clause 3(c)(2) of rule XIII of the Rules of the
C. Cost Estimate Prepared by the
In compliance with clause 3(d) of rule XIII of the Rules of the
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of the
C. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423 of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104- 4).
The Committee has determined that the bill does not contain Federal mandates on the private sector. The Committee has determined that the bill does not impose a Federal intergovernmental mandate on State, local, or tribal governments.
D. Applicability of House Rule XXI 5(b)
Rule XXI 5(b) of the Rules of the
E. Tax Complexity Analysis
Section 4022(b) of the Internal Revenue Service Restructuring and Reform Act of 1998 ("
Pursuant to clause 3(h)(1) of rule XIII of the Rules of the
F. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff Benefits
With respect to clause 9 of rule XXI of the Rules of the
G. Duplication of Federal Programs
In compliance with Sec. 3(c)(5) of rule XIII of the Rules of the
H. Disclosure of Directed Rule Makings
In compliance with Sec. 3(i) of
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
B. Changes in Existing Law Proposed by the Bill, as Reported
In compliance with clause 3(e)(1)(B) of rule XIII of the Rules of the
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of the
INTERNAL REVENUE CODE OF 1986
MINORITY VIEWS
H.R. 6301 Promoting High-Value Health Care Through Flexibility for High Deductible Health Plans Act of 2018
H.R. 6301 (Roskam, R-
At the beginning of the mark up,
H.R. 6301 does not undo sabotage, premium hikes, and benefit cuts
Legislation busts the deficit to benefit the wealthy, again. Altogether, the 11 bills that were marked up would add another
High Deductible Health Plans (HDHPs) and Health Savings Accounts (HSAs) do not promote healthy behavior. It is widely acknowledged that HSAs and HDHPs lead consumers to delay care. They do not encourage individuals to make better health care decisions, as
According to the
HSAs mostly benefit high-income taxpayers while doing little to help moderate-income families or the uninsured. High- income people can best afford to save for health care expenses and are, therefore, the most likely to contribute to HSAs. Higher income filers are much likelier to establish HSAs than lower income filers--70 percent of HSA contributions come from households with incomes over
JCT estimates the cost of this bill to be
Ranking Member.
The full text of the report is found at: https://www.congress.gov/congressional-report/115th-congress/house-report/845/1?r=9
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