January 13, 2020

Recently, the House Ways and Means Committee passed a bipartisan bill (H.R. 3708 – Primary Care Enhancement Act of 2019) that would amend HSA law to remove barriers for people enrolled in direct primary care arrangements.

Under existing law, the IRS considers direct primary care arrangements as other coverage or insurance preventing enrolled people from contributing to HSAs or using HSA funds to pay for periodic fees. The bill would amend the statute to permit people to contribute to HSAs or use HSA funds as long as DCPAs meet the following requirements:

• Monthly fees do not exceed $150/$300 (individual/other than individual coverage) indexed to inflation;
• The provided primary care services do not include procedures requiring general anesthesia, administration of prescription drugs (excluding vaccines), and lab services not typically administered in an ambulatory primary care setting.

The Business Group strongly supports and has long advocated for HSA enhancements that would amend arcane IRS rules that prohibit adoption of innovative consumer-directed health plan (CDHP) designs, including those designs that seek to transition away from fee-for-service, encounter-based reimbursement to more comprehensive, patient-centered population health management. The Business Group is drafting a support letter for the legislation.

The bill now advances to the full House of Representatives for consideration where a vote could be scheduled later this year. In 2018, a broader HSA enhancement bill, including this provision, passed the House but wasn’t taken up in the Senate. It’s unclear whether the Senate would pass a narrower bill.

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