[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3799 Introduced in House (IH)]
<DOC>
118th CONGRESS
1st Session
H. R. 3799
To amend the Internal Revenue Code of 1986 to provide for health
reimbursement arrangements integrated with individual health insurance
coverage.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 5, 2023
Mr. Hern 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 provide for health
reimbursement arrangements integrated with individual health insurance
coverage.
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 ``Custom Health Option and Individual
Care Expense Arrangement Act'' or the ``CHOICE Arrangement Act''.
SEC. 2. TREATMENT OF HEALTH REIMBURSEMENT ARRANGEMENTS INTEGRATED WITH
INDIVIDUAL MARKET COVERAGE.
(a) In General.--Section 9815(b) of the Internal Revenue Code of
1986 is amended--
(1) by striking ``Exception.--Notwithstanding subsection
(a)'' and inserting the following: ``Exceptions.--
``(1) Self-insured group health plans.--Notwithstanding
subsection (a)'', and
(2) by adding at the end the following new paragraph:
``(2) Custom health option and individual care expense
arrangements.--
``(A) In general.--For purposes of this subchapter,
a custom health option and individual care expense
arrangement shall be treated as meeting the
requirements of sections 2711 and 2713 of title XXVII
of the Public Health Service Act.
``(B) Custom health option and individual care
expense arrangements defined.--For purposes of this
section, the term `custom health option and individual
care expense arrangement' means a health reimbursement
arrangement--
``(i) which is an employer-provided group
health plan funded solely by employer
contributions to provide payments or
reimbursements for medical care subject to a
maximum fixed dollar amount for a period,
``(ii) under which such payments or
reimbursements may only be made for medical
care provided during periods during which the
individual is covered--
``(I) under individual health
insurance coverage (other than coverage
that consists solely of excepted
benefits), or
``(II) under parts A and B of title
XVIII of the Social Security Act or
part C of such title,
``(iii) which meets the nondiscrimination
requirements of subparagraph (C),
``(iv) which meets the substantiation
requirements of subparagraph (D), and
``(v) which meets the notice requirements
of subparagraph (E).
``(C) Nondiscrimination.--
``(i) In general.--An arrangement meets the
requirements of this subparagraph if an
employer offering such arrangement to an
employee within a specified class of employee--
``(I) offers such arrangement to
all employees within such specified
class on the same terms, and
``(II) does not offer any other
group health plan to any employees
within such specified class.
``(ii) Specified class of employee.--For
purposes of this subparagraph, any of the
following may be designated as a specified
class of employee:
``(I) Full-time employees.
``(II) Part-time employees.
``(III) Salaried employees.
``(IV) Non-salaried employees.
``(V) Employees whose primary site
of employment is in the same rating
area.
``(VI) Employees who are included
in a unit of employees covered under a
collective bargaining agreement to
which the employer is subject
(determined under rules similar to the
rules of section 105(h)).
``(VII) Employees who have not met
a group health plan, or health
insurance issuer offering group health
insurance coverage, waiting period
requirement that satisfies the
requirements of section 2708 of the
Public Health Service Act.
``(VIII) Seasonal employees.
``(IX) Employees who are
nonresident aliens and who receive no
earned income (within the meaning of
section 911(d)(2)) from the employer
which constitutes income from sources
within the United States (within the
meaning of section 861(a)(3)).
``(X) Such other classes of
employees as the Secretary may
designated.
An employer may designate (in such manner as is
prescribed by the Secretary) two or more of the
classes described in the preceding subclauses
as the specified class of employees to which
the arrangement is offered for purposes of
applying this subparagraph.
``(iii) Special rule for new hires.--An
employer may designate prospectively so much of
a specified class of employees as are hired
after a date set by the employer. Such subclass
of employees shall be treated as the specified
class for purposes of applying clause (i).
``(iv) Rules for determining type of
employee.--For purposes of clause (ii), any
determination of full-time, part-time, or
seasonal employment status shall be made under
rules similar to the rules of section 105(h) or
4980H, whichever the employer elects for the
plan year. Such election shall apply with
respect to all employees of the employer for
the plan year.
``(v) Permitted variation.--For purposes of
clause (i)(I), an arrangement shall not fail to
be treated as provided on the same terms within
a specified class merely because the maximum
dollar amount of payments and reimbursements
which may be made under the terms of the
arrangement for the year with respect to each
employee within such class--
``(I) increases as additional
dependents of the employee are covered
under the arrangement, and
``(II) increases with respect to a
participant as the age of the
participant increases, but not in
excess of an amount equal to 300
percent of the lowest maximum dollar
amount with respect to such a
participant determined without regard
to age.
``(D) Substantiation requirements.--An arrangement
meets the requirements of this subparagraph if the
arrangement has reasonable procedures to substantiate--
``(i) that the participant is, or will be,
enrolled in coverage described in subparagraph
(B)(ii) as of the beginning of the plan year of
the arrangement (or as of the beginning of
coverage under the arrangement in the case of
an employee who first becomes eligible to
participate in the arrangement after the date
notice is given with respect to the plan under
subparagraph (E) (determined without regard to
clause (iii) thereof)), and
``(ii) any requests made for payment or
reimbursement of medical care under the
arrangement and that the participant remains so
enrolled.
``(E) Notice.--
``(i) In general.--Except as provided in
clause (iii), an arrangement meets the
requirements of this subparagraph if, under the
arrangement, each employee eligible to
participate is, not later than 90 days before
the beginning of the plan year, given written
notice of the employee's rights and obligations
under the arrangement which--
``(I) is sufficiently accurate and
comprehensive to appraise the employee
of such rights and obligations, and
``(II) is written in a manner
calculated to be understood by the
average employee eligible to
participate.
``(ii) Notice requirements.--Such notice
shall include such information as the Secretary
may by regulation prescribe.
``(iii) Notice deadline for certain
employees.--In the case of an employee--
``(I) who first becomes eligible to
participate in the arrangement after
the date notice is given with respect
to the plan under clause (i)
(determined without regard to this
clause), or
``(II) whose employer is first
established fewer than 120 days before
the beginning of the first plan year of
the arrangement,
the requirements of this subparagraph shall be
treated as met if the notice required under
clause (i) is provided not later than the date
the arrangement may take effect with respect to
such employee.''.
(b) No Inference.--To the extent not inconsistent with the
amendments made by this section--
(1) no inference shall be made from such amendments with
respect to the rules prescribed in the Federal Register on June
20, 2019 (84 Fed. Reg. 28888), relating to health reimbursement
arrangements and other account-based group health plans, and
(2) any reference to custom health option and individual
care expense arrangements shall for purposes of such rules be
treated as including a reference to individual coverage health
reimbursement arrangements.
(c) Effective Date.--The amendments made by this subsection shall
apply to plan years beginning after December 31, 2023.
<all>