[House Report 118-680]
[From the U.S. Government Publishing Office]
118th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 118-680
======================================================================
CHRONIC DISEASE FLEXIBLE COVERAGE ACT
_______
September 17, 2024.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Smith of Missouri, from the Committee on Ways and Means, submitted
the following
R E P O R T
together with
DISSENTING AND SUPPLEMENTAL VIEWS
[To accompany H.R. 3800]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 3800) to codify Internal Revenue Service guidance
relating to treatment of certain services and items for chronic
conditions as meeting the preventive care deductible safe
harbor for purposes of high deductible health plans in
connection with health savings accounts, having considered the
same, reports favorably thereon with an amendment and
recommends that the bill as amended do pass.
CONTENTS
Page
I. SUMMARY AND BACKGROUND...........................................2
A. Purpose and Summary................................. 2
B. Background and Need for Legislation................. 2
C. Legislative History................................. 3
D. Designated Hearing.................................. 4
II. EXPLANATION OF THE BILL..........................................4
A. Services and Items for Chronic Conditions Treated as
Preventive Care (sec. 2 of the bill and Sec. 223 of
the Code).......................................... 4
III. VOTE OF THE COMMITTEE............................................6
IV. BUDGET EFFECTS OF THE BILL.......................................7
A. Committee Estimate of Budgetary Effects............. 7
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority...................... 7
C. Cost Estimate Prepared by the Congressional Budget
Office............................................. 7
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE......14
A. Committee Oversight Findings and Recommendations.... 14
B. Statement of General Performance Goals and
Objectives......................................... 14
C. Information Relating to Unfunded Mandates........... 14
D. Congressional Earmarks, Limited Tax Benefits, and
Limited Tariff Benefits............................ 14
E. Tax Complexity Analysis............................. 14
F. Duplication of Federal Programs..................... 15
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED...........15
A. Changes in Existing Law Proposed by the Bill, as
Reported........................................... 15
VII. DISSENTING VIEWS................................................16
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Chronic Disease Flexible Coverage
Act''.
SEC. 2. SERVICES AND ITEMS FOR CHRONIC CONDITIONS TREATED AS PREVENTIVE
CARE.
(a) In General.--The additional preventive care services and items
for chronic conditions that may be treated as preventive care for
purposes of section 223(c)(2)(C) of the Internal Revenue Code of 1986
as set forth in IRS Notice 2019-45 shall have the same force and effect
as if included in the enactment of this Act.
(b) No Inference.--To the extent not inconsistent with this section,
no inference shall be made from subsection (a) with respect to such
other rules or guidance as the Secretary has provided, or may provide,
with respect to preventive services for purposes of section
223(c)(2)(C) of such Code.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
The bill, H.R. 3800, the ``Chronic Disease Flexible
Coverage Act,'' as ordered reported by the Committee on Ways
and Means on June 7, 2023, codifies IRS Notice 2019-45.
B. Background and Need for Legislation
In order for an individual with a High Deductible Health
Plan (HDHP) to make or receive contributions to an Health
Savings Account (HSA), an individual cannot have disqualifying
health coverage. An HDHP is a health insurance plan that
satisfies certain requirements with respect to minimum
deductibles and maximum out-of-pocket expenses. Generally,
under section 223(c)(2)(A) of the Internal Revenue Code, an
HDHP may not provide benefits for any year until the minimum
deductible for that year is satisfied. However, section
223(c)(2)(C) provides a safe harbor for the absence of a
deductible for preventive care.
In 2019, the Trump Administration expanded the list of
services that an employer can cover before the deductible to
include select low-cost preventive care that helps maintain
health status for individuals with chronic conditions. This
list includes 14 specific services that meet three criteria:
1. The service or item is low-cost;
2. There is medical evidence supporting high cost
efficiency (a large expected impact) of preventing
exacerbation of the chronic condition or the
development of a secondary condition; and
3. There is a strong likelihood, documented by
clinical evidence, that with respect to the class of
individuals prescribed the item or service, the
specific service or use of the item will prevent the
exacerbation of the chronic condition or the
development of a secondary condition that requires
significantly higher cost treatments.
IRS Notice 2019-45 includes the following services for
individuals with the following conditions:
------------------------------------------------------------------------
------------------------------------------------------------------------
Preventive Care for Specified Conditions For Individuals Diagnosed
with
Angiotensin Converting Enzyme (ACE) Congestive heart failure,
inhibitors diabetes, and/or coronary
artery disease
Anti-resorptive therapy Osteoporosis and/or
osteopenia
Beta-blockers Congestive heart failure and/
or coronary artery disease
Blood pressure monitor Hypertension
Inhaled corticosteroids Asthma
Insulin and other glucose lowering agents Diabetes
Retinopathy screening Diabetes
Peak flow meter Asthma
Glucometer Diabetes
Hemoglobin A1c testing Diabetes
International Normalized Ratio (INR) Liver disease and/or
testing bleeding disorders
Low-density Lipoprotein (LDL) testing Heart disease
Selective Serotonin Reuptake Inhibitors Depression
(SSRIs)
Statins Heart disease and/or
diabetes
------------------------------------------------------------------------
Because these new flexibilities were made available through
agency action, the Committee believes it is necessary to codify
the flexibilities so health insurance plans and plan sponsor
can be confident this flexibility will remain, while ensuring
the Secretary of Treasury continues to have authority to add
additional services to the list, as necessary.
C. Legislative History
Background
H.R. 3800 was introduced on June 5, 2023, and was referred
to the Committee on Ways and Means.
Committee Hearings
On Tuesday, May 16, 2023 the Committee held a Full
Committee Hearing on ``Why Health Care is Unaffordable: The
Fallout of Democrats' Inflation on Patients and Small
Businesses''.
Committee Action
The Committee on Ways and Means marked up H.R. 3800, the
``Chronic Disease Flexible Coverage Act,'' on June 7, 2023, and
ordered the bill, as amended, favorably reported (with a quorum
being present).
D. Designated Hearing
Pursuant to clause 3(c)(6) of rule XIII, the following
hearings were used to develop and consider H.R. 3800:
(1) Committee on Ways and Means Committee Hearing
``Why Health Care is Unaffordable: The Fallout of
Democrats' Inflation on Patients and Small
Businesses''.
II. EXPLANATION OF THE BILL
A. Services and Items for Chronic Conditions Treated as Preventive Care
(sec. 2 of the Bill and Sec. 223 of the Code)
PRESENT LAW
Health savings accounts
An individual may contribute to 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. 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.\1\ The HSA rules allow deductible contributions to,
and tax-exempt distributions from, HSAs for current medical
expenses as well as an income tax exemption for earnings on HSA
investments to be used for future medical expenses.
---------------------------------------------------------------------------
\1\Sec. 223(d).
---------------------------------------------------------------------------
Within limits,\2\ an eligible individual is allowed a
deduction for contributions to an HSA made by or on behalf of
the individual.\3\ Contributions to an HSA are excludible from
an individual's income and from employment taxes if made by the
individual's employer. Earnings in HSAs are not taxable.\4\
Distributions from an HSA for qualified medical expenses are
not includible in the HSA beneficiary's gross income.\5\
Distributions from an HSA that are not used for qualified
medical expenses are includible in the HSA beneficiary's gross
income and are subject to an additional tax of 20 percent.\6\
The 20-percent additional tax does not apply if the
distribution is made after the beneficiary dies, becomes
disabled, or attains the age of Medicare eligibility (age
65).\7\
---------------------------------------------------------------------------
\2\For 2023, the basic limit on annual contributions that can be
made to an HSA is $3,850 in the case of self-only coverage and $7,750
in the case of family coverage. Rev. Proc. 2022-24, 2022-20 I.R.B.
1075. The basic annual contributions limits are increased by $1,000 for
individuals who have attained age 55 by the end of the taxable year
(referred to as ``catch-up'' contributions). Sec. 223(b)(3).
\3\A family member (or any other person) may make contributions to
an HSA on behalf of an eligible individual. See Notice 2004 50, Q & A
38, 2003 33, I.R.B. 196 (August 9, 2004).
\4\Sec. 223(e).
\5\Sec. 223(f)(1).
\6\Sec. 223(f)(2), (4).
\7\Sec. 223(f)(4).
---------------------------------------------------------------------------
High deductible health plans
A high deductible health plan (``HDHP'') is a health plan
that has an annual deductible of at least $1,500 (for 2023) for
self-only coverage and twice this amount for family coverage
($3,000 for 2023), and for which the sum of the annual
deductible and other annual out-of-pocket expenses (other than
premiums) for covered benefits does not exceed $7,500 (for
2023) for self-only coverage and twice this amount for family
coverage ($15,000 for 2023).\8\ These dollar thresholds are
adjusted for inflation.\9\
---------------------------------------------------------------------------
\8\Sec. 223(c)(2).
\9\Sec. 223(g).
---------------------------------------------------------------------------
An individual who is covered under an HDHP is eligible to
contribute to an HSA if the individual is not also covered
under a non-HDHP that provides coverage for any benefit
(subject to certain exceptions) that is covered under the
HDHP.\10\
---------------------------------------------------------------------------
\10\Sec. 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 spending arrangements.\11\ 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 Treasury 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.\12\
---------------------------------------------------------------------------
\11\Sec. 223(c)(1)(B).
\12\Sec. 223(c)(3).
---------------------------------------------------------------------------
Under a safe harbor, an HDHP 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.\13\ Internal Revenue Service (``IRS'') guidance
provides a safe harbor for the types of coverage that
constitute preventive care for this purpose.\14\
---------------------------------------------------------------------------
\13\Sec. 223(c)(2)(C).
\14\Notice 2004-23, 2004-15 I.R.B. 725 (April 12, 2004). See also
Notice 2004-50, 2004-33 IRB 1 (August 9, 2004); Notice 2008-59, 2008-29
I.R.B. 123 (July 21, 2008); Notice 2013-37, 2013-40 I.R.B. 293
(September 30, 2013); Notice 2018-12, 2018-12 I.R.B. 441 (March 19,
2018); and Notice 2019-45, 2019-32 I.R.B. 593 (August 5, 2019).
---------------------------------------------------------------------------
Preventive care
As noted, IRS guidance provides a safe harbor for
preventive care benefits allowed under an HDHP. The IRS defines
preventive care as including, but not limited to (1) periodic
health evaluations, including tests and diagnostic procedures
ordered in connection with routine examinations, such as annual
physicals; (2) routine prenatal and well-child care; (3)
immunizations; (4) tobacco cessation programs; (5) obesity
weight-loss programs; and (6) screening services (such as
screening for cancer, heart and vascular diseases, infectious
diseases, mental health conditions and substance abuse,
metabolic, nutritional, and endocrine conditions,
musculoskeletal disorders, obstetric and gynecologic
conditions, pediatric conditions, and vision and hearing
disorders). Although the guidance provides that preventive care
does not generally include any service or benefit intended to
treat an existing illness, injury, or condition (with the
exception of chronic conditions, as described below), any
treatment that is incidental or ancillary to a safe harbor
preventive care service or screening (in situations where it
would be unreasonable or impracticable to perform another
procedure to treat the condition), such as the removal of
polyps during a diagnostic colonoscopy, also falls within the
safe harbor. In addition, drugs or medications are considered
to be preventive care when taken by a person who has developed
risk factors for a disease that has not yet manifested itself
or not yet become clinically apparent, or to prevent the
reoccurrence of a disease from which a person has recovered.
Under a 2019 Executive Order, the Treasury Department was
required to issue guidance to expand the ability of patients to
select an HDHP that could be used with an HSA to cover, before
the deductible, low-cost preventive care for individuals with
chronic conditions.\15\
---------------------------------------------------------------------------
\15\Executive Order 13877, ``Improving Price and Quality
Transparency in American Healthcare to Put Patients First,'' 84 Fed.
Reg. 30849 (June 27, 2019).
---------------------------------------------------------------------------
Notice 2019-45\16\ expands the list of preventive care
benefits permitted to be provided by an HDHP, before the
deductible, to include specified preventive care for specified
chronic conditions.
---------------------------------------------------------------------------
\16\2019-32 I.R.B. 593 (August 5, 2019).
---------------------------------------------------------------------------
Preventive care also encompasses such services that are
required to be included by a group health plan or health
insurance issuer offering group or individual health insurance
coverage under section 2713 of the Public Health Service
Act.\17\
---------------------------------------------------------------------------
\17\Notice 2019-45 provides that ``[a]lthough this notice clarifies
that benefits for the specified services and items for individuals with
the specified chronic conditions listed in the Appendix are preventive
care for purposes of section 223(c)(2)(C), it does not treat these
services and items as preventive care required to be provided without
cost sharing for purposes of section 2713 of the PHS Act.''
---------------------------------------------------------------------------
REASONS FOR CHANGE
The Committee observes that having coverage under an HDHP
that covers low-cost preventive care before the deductible for
individuals with chronic conditions helps maintain these
individuals' health status and prevents exacerbation of the
condition or the development of a secondary condition. The
Committee believes that encouraging chronic care management
through current and expanding access to such preventive
services will result in better health outcomes for individuals
with chronic conditions.
EXPLANATION OF PROVISION
The provision provides that the IRS Notice 2019-45 guidance
describing the additional preventive care services and items
for chronic conditions that, under Notice 2019-45, may be
treated as preventive care for purposes of section
223(c)(2)(C), has the same force and effect as if included in
the enactment of this provision.
To the extent not inconsistent with the provision, no
inference may be made with respect to such other rules or
guidance as the Secretary has provided, or may provide, with
respect to preventive services for purposes of section
223(c)(2)(C).
EFFECTIVE DATE
The provision is effective on the date of enactment.
III. VOTE OF THE COMMITTEE
Pursuant to clause 3(b) of rule XIII of the Rules of the
House of Representatives, the following statement is made
concerning the vote of the Committee on Ways and Means in its
consideration of H.R. 3800, the ``Chronic Disease Flexible
Coverage Act,'' on June 7, 2023.
The bill, H.R. 3800, the ``Chronic Disease Flexible
Coverage Act,'' as amended, was ordered favorably reported to
the House of Representatives by a roll call vote of 34 yeas to
6 nays (with a quorum being present).
----------------------------------------------------------------------------------------------------------------
Representative Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO)..................... X ...... ......... Mr. Neal............. X ...... .........
Mr. Buchanan....................... X ...... ......... Mr. Doggett.......... ...... X .........
Mr. Smith (NE)..................... X ...... ......... Mr. Thompson......... X ...... .........
Mr. Kelly.......................... X ...... ......... Mr. Larson........... X ...... .........
Mr. Schweikert..................... X ...... ......... Mr. Blumenauer....... X ...... .........
Mr. LaHood......................... X ...... ......... Mr. Pascrell......... X ...... .........
Dr. Wenstrup....................... X ...... ......... Mr. Davis............ ...... X .........
Mr. Arrington...................... ...... ...... ......... Ms. Sanchez.......... ...... ...... .........
Dr. Ferguson....................... X ...... ......... Mr. Higgins.......... ...... X .........
Mr. Estes.......................... X ...... ......... Ms. Sewell........... ...... X .........
Mr. Smucker........................ X ...... ......... Ms. DelBene.......... X ...... .........
Mr. Hern........................... ...... ...... ......... Ms. Chu.............. ...... X .........
Ms. Miller......................... X ...... ......... Ms. Moore............ ...... X .........
Dr. Murphy......................... X ...... ......... Mr. Kildee........... X ...... .........
Mr. Kustoff........................ X ...... ......... Mr. Beyer............ X ...... .........
Mr. Fitzpatrick.................... X ...... ......... Mr. Evans............ X ...... .........
Mr. Steube......................... X ...... ......... Mr. Schneider........ X ...... .........
Ms. Tenney......................... X ...... ......... Mr. Panetta.......... X ...... .........
Mrs. Fischbach..................... X ...... .........
Mr. Moore.......................... X ...... .........
Mrs. Steel......................... X ...... .........
Ms. Van Duyne...................... X ...... .........
Mr. Feenstra....................... X ...... .........
Ms. Malliotakis.................... X ...... .........
Mr. Carey.......................... X ...... .........
----------------------------------------------------------------------------------------------------------------
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 House of Representatives, the following statement is made
concerning the effects on the budget of the bill, H.R. 3800, as
reported.
The bill is estimated to have no effect on the Federal
fiscal year budget receipts for the period 2023 through 2033.
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no new or increased budget authority. The
Committee states further that the bill involves no new or
increased tax expenditures.
C. Cost Estimate Prepared by the Congressional Budget Office
The following cost estimate was prepared by the CBO and the
statement by CBO is provided.
Bill summary: On June 7, 2023, the Committee on Ways and
Means ordered nine bills to be reported. This document provides
estimates for each piece of legislation.
Generally, the legislation would:
Permanently establish what is known as a
safe harbor, which allows high-deductible health plans
to provide telehealth services without making
participants ineligible to use health savings accounts;
Modify certain reporting requirements for
employers and codify existing regulations or guidance
related to employment-based health insurance coverage;
Designate certain airports as ports of entry
if they are within 30 miles of the southern or northern
border of the United States; and
Require the Social Security Administration
(SSA) to take certain actions in the event of loss or
misuse of a Social Security number.
Estimated Federal cost: The estimated direct spending and
revenue effects of the legislation are shown in Table 1. The
costs of the legislation fall within budget functions 650
(Social Security), 750 (administration of justice), and 800
(general government).
Basis of estimate: For this estimate, CBO assumes that each
bill will be enacted late in fiscal year 2023 and that spending
of appropriated amounts will begin in fiscal year 2024. The
Congressional Budget Act of 1974, as amended, stipulates that
revenue estimates provided by the staff of the Joint Committee
on Taxation (JCT) will be the official estimates for all tax
legislation considered by the Congress. CBO, therefore,
incorporates those estimates into its cost estimates of the
effects of legislation.
Direct spending: CBO estimates that one bill of the nine
would affect direct spending: H.R. 3796 would designate as
ports of entry certain airports within 30 miles of the southern
or northern border of the United States. Under current law,
Customs and Border Protection (CBP) collects customs user fees,
including immigration user fees and fees collected under the
Consolidated Omnibus Budget Reconciliation Act (COBRA), at
designated ports of entry. Those fees, which are deposited into
the Treasury as offsetting receipts, are classified as direct
spending. CBO expects that fewer than five airports would be
designated as ports of entry under the bill and that the
increase in collections of customs user fees under the bill
would be small.
Therefore, CBO estimates that enacting H.R. 3796 would
reduce net direct spending by less than $500,000 over the 2023-
2033 period.
TABLE 1.--ESTIMATED EFFECTS ON DIRECT SPENDING AND REVENUES OF HEALTH CARE AND OTHER LEGISLATION ORDERED REPORTED BY THE HOUSE COMMITTEE ON WAYS AND
MEANS ON JUNE 7, 2023
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
----------------------------------------------------------------------------------------------------------------------
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2023-2028 2023-2033
--------------------------------------------------------------------------------------------------------------------------------------------------------
DECREASES (-) IN DIRECT SPENDING
H.R. 3796, a bill to provide for
the extension of taxes funding
the Airport and Airway Trust
Fund and to require the
designation of certain airports
as ports of entry:
Estimated Budget Authority... 0 * * * * * * * * * * * *
Estimated Outlays............ 0 * * * * * * * * * * * *
DECREASES (-) IN REVENUES
H.R. 1843, the Telehealth
Expansion Act of 2023:
Estimated Revenues........... 0 0 -225 -386 -471 -555 -605 -642 -681 -722 -766 -1,636 -5,053
On-Budget................ 0 0 -167 -293 -359 -422 -460 -487 -516 -547 -580 -1,240 -3,831
Off-Budget............... 0 0 -58 -93 -112 -133 -145 -155 -165 -175 -186 -396 -1,222
H.R. 3801, the Employer Reporting
Improvement Act:
Estimated Revenues........... 0 0 * * * * * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sources: Congressional Budget Office; staff of the Joint Committee on Taxation.
Components may not sum to totals because of rounding; * = between -$500,000 and zero.
Off-budget effects reflect decreases in payroll taxes for Social Security.
Revenues: CBO and JCT estimate that two bills would affect
revenues over the 2023-2033 period. A third (H.R. 3796) would
affect revenues; for reasons described below, those effects are
not included in the cost estimate.
H.R. 1843, the Telehealth Expansion Act of 2023, would
permanently establish a safe harbor, allowing high-deductible
health plans to provide telehealth and other remote care
services without making participants ineligible to use health
savings accounts. A safe-harbor provision is currently in
effect for calendar years 2020 through 2024. Subject to certain
limits, contributions made by an individual to a health savings
account are deductible for income tax purposes, and
contributions made through a cafeteria plan are excludible from
income for both income and payroll tax purposes. JCT estimates
that the permanent extension would reduce revenues by $5.1
billion over the 2023-2033 period. That reduction CBO Cost
Estimate Page 4 Health care and other legislation, as ordered
reported by the House Committee on Ways and Means includes a
$3.8 billion reduction in on-budget revenues and a $1.2 billion
reduction in off-budget revenues because it would affect Social
Security payroll tax collections.
H.R. 3801, the Employer Reporting Improvement Act, would
establish a six-year statute of limitations on the assessment
of penalties for violating the employer mandate for health
insurance coverage under current law. The change would take
effect on January 1, 2025. The bill also would allow employers
90 days to respond to the first letter informing them of a
proposed assessment, and it would codify employers' right to
file reports electronically and to report an employee's date of
birth if a tax identification number is not available. CBO and
JCT estimate that the bill would lead to an insignificant
decrease in collections of penalties, thus decreasing revenues
by less than $500,000 over the 2023-2033 period.
H.R. 3796, a bill to provide for the extension of taxes
funding the Airport and Airway Trust Fund and to require the
designation of certain airports as ports of entry, would extend
certain excise taxes related to air travel, which are dedicated
to the Airport and Airways Trust Fund (and currently scheduled
to expire on September 30, 2023), through September 30, 2028.
Because the Balanced Budget and Emergency Deficit Control Act
of 1985 requires CBO's baseline projections to incorporate the
assumption that expiring excise taxes dedicated to trust funds
will be extended, JCT estimates that the extension would have
no effect on revenues relative to CBO's baseline. In its
baseline, CBO projects that collections of those taxes will
total about $100 billion over the 2024-2028 period--the time
covered by the extension. The bill also would newly designate
certain airports as ports of entry, which would affect
discretionary spending (see ``Spending Subject to
Appropriation'').
Legislation With No Effect on Direct Spending or Revenues:
CBO and JCT estimate that six bills, described below, would
have no effect on direct spending or revenues over the 2023-
2033 period.
H.R. 3667, the Social Security Child Protection Act of
2023, would require SSA to issue a new Social Security number
to a child under the age of 14 if a parent can provide evidence
that the confidentiality of the original number has been
compromised by loss or theft.
H.R. 3784, the Improving Social Security's Service to
Victims of Identity Theft Act, would require SSA to provide a
single point of contact for a person whose Social Security
number is misused or whose card is lost.
H.R. 3797, the Paperwork Burden Reduction Act, would codify
existing rules of the Department of the Treasury and provide
additional flexibility for employers when providing information
about health insurance coverage to employees for tax-filing
purposes.
H.R. 3798, the Small Business Flexibility Act, would
require the Secretary of the Treasury to notify employers of
the availability of tax-advantaged flexible health insurance
benefits, with an initial focus on small businesses.
H.R. 3799, the Custom Health Option and Individual Care
Expense Arrangement Act (or CHOICE Arrangement Act), would
codify a regulation that expands the use of health
reimbursement arrangements by allowing employers to provide
funds to employees through individual coverage health
reimbursement arrangements. Those arrangements permit workers
to purchase health insurance through the nongroup market rather
than receiving coverage through traditional employment-based
health insurance.\1\
---------------------------------------------------------------------------
\1\See Health Reimbursement Arrangements and Other Account-Based
Group Health Plans, 84 Fed. Reg. 28, 888 (June 20, 2019) (to be
codified at 26 C.F.R. pts. 1 and 54; 29 C.F.R. pts. 2510 and 2590; and
45 C.F.R. pts. 144, 146, 147, and 155).
---------------------------------------------------------------------------
H.R. 3800, the Chronic Disease Flexible Coverage Act, would
codify existing Internal Revenue Service guidance, which states
that treatment of chronic diseases is considered preventive
care. Under that guidance, high-deductible insurance plans can
provide such coverage without making enrollees ineligible to
participate in health savings accounts.
Spending subject to appropriation: CBO estimates that all
nine bills would increase spending subject to appropriation:
two would do so by significant amounts (more than $500,000) and
the rest would result in insignificant increases (less than
$500,000) over the 2023-2028 period (see Table 2). Any spending
would be subject to the availability of appropriated funds.
TABLE 2.--ESTIMATED INCREASES IN SPENDING SUBJECT TO APPROPRIATION UNDER H.R. 3796 AND H.R. 3667
----------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
----------------------------------------------------------------
2023 2024 2025 2026 2027 2028 2023-2028
----------------------------------------------------------------------------------------------------------------
H.R. 3796, a bill to provide for the extension
of taxes funding the Airport and Airway Trust
Fund and to require the designation of certain
airports as ports of entry:a
Estimated Authorization.................... 0 1 1 1 1 1 5
Estimated Outlays.......................... 0 1 1 1 1 1 5
H.R. 3667, the Social Security Child Protection
Act of 2023:
Estimated Authorization.................... 0 * * * * * 1
Estimated Outlays.......................... 0 * * * * * 1
----------------------------------------------------------------------------------------------------------------
* = between zero and $500,000. CBO estimates that increases in spending subject to appropriation would be
between zero and $500,000 in each year and over the 2024-2028 period for the other bills in this estimate
(H.R. 1843, H.R. 3784, H.R. 3797, H.R. 3798, H.R. 3799, H.R. 3800, and H.R. 3801).
a CBO estimates that H.R. 3796 also would have effects on direct spending (see Table 1).
H.R. 3796, a bill to provide for the extension of taxes
funding the Airport and Airway Trust Fund and to require the
designation of certain airports as ports of entry, would result
in fewer than five airports being so designated, CBO expects.
Under current law, CBP provides customs inspections at most
airports that are funded in part through customs user fees,
such as immigration user fees and fees collected under COBRA.
Other airports, where the volume of passenger or cargo traffic
is smaller, may voluntarily pay CBP to reimburse the agency for
providing those inspections. Airports designated as ports of
entry under the bill would no longer be subject to the fees.
CBO estimates that the increase in collections of customs
user fees under the bill (see ``Direct Spending'') would not
fully cover the cost to CBP for providing inspections and that
implementing the bill would require the appropriation of
additional funds to cover those costs. Under current law, the
airports that CBO expects to be included under the bill pay CBP
a total of $1 million each year. Accounting for anticipated for
inflation, CBO estimates that implementing H.R. 3796 would cost
$5 million over the 2023-2028 period.
H.R. 3667, the Social Security Child Protection Act of
2023, would require SSA to issue a new Social Security number
to a child under the age of 14 if a parent can present evidence
that the number's confidentiality was compromised because of
loss or theft. Under current law, SSA issues new numbers only
when a number is misused and if the misuse has caused harm. In
2022, SSA issued 116 new numbers to children under the age of
14. CBO expects that requests for new numbers would increase
under the bill and that SSA would issue more numbers.
Consequently, CBO estimates that implementing the bill would
cost $1 million over the 2023-2028 period.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays and revenues for the three
bills that are subject to those pay-as-you-go procedures are
shown in Table 1.
Increase in long-term net direct spending and deficits: CBO
estimates that none of the bills would increase net direct
spending in any of the four consecutive 10-year periods
beginning in 2034.
JCT estimates that enacting H.R. 1843 would increase on-
budget deficits by more than $5 billion in at least one of the
four consecutive 10-year periods beginning in 2034.
JCT estimates that none of the remaining eight bills would
increase on-budget deficits by more than $5 billion in any of
the four consecutive 10-year periods beginning in 2034.
Mandates: CBO and JCT have determined that the legislation
would not impose any intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act.
Previous CBO estimate: On June 20, 2023, CBO transmitted an
estimate of the direct spending and revenue effects of Rules
Committee Print 118-9 (H.R. 3799, the CHOICE Arrangement Act),
as amended by Amendment 8 (Smith). The language in title II and
title IV of Rules Committee Print 118-9 is the same as that in
H.R. 3799 and H.R. 3798, respectively, and the estimated
budgetary effects are the same.
Estimate prepared by: Federal costs: Jeremy Crimm (customs
fees), Noah Meyerson (Social Security), Matthew Pickford
(Internal Revenue Service); Federal revenues: Jessica Hale,
Emily Vreeland, Staff of the Joint Committee on Taxation;
Mandates: Andrew Laughlin, Staff of the Joint Committee on
Taxation.
Estimate reviewed by: Elizabeth Cove Delisle, Chief, Income
Security Cost Estimates Unit; Justin Humphrey, Chief, Finance,
Housing, and Education Cost Estimates Unit; Susan Willie,
Chief, Natural and Physical Resources Cost Estimates Unit;
Kathleen FitzGerald, Chief, Public and Private Mandates Unit;
Sarah Masi, Senior Adviser, Budget Analysis Division; Joshua
Shakin, Chief, Revenue Estimating Unit; H. Samuel Papenfuss,
Deputy Director of Budget Analysis; Chad Chirico, Director of
Budget Analysis; John McClelland, Director of Tax Analysis.
Estimate approved by: Phillip L. Swagel, Director,
Congressional Budget Office.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives, the Committee made findings and
recommendations that are reflected in this report.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill does not authorize funding, so no statement of general
performance goals and objectives is required.
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. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill, and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
E. Tax Complexity Analysis
Pursuant to clause 3(h)(1) of rule XIII of the Rules of the
House of Representatives, the staff of the Joint Committee on
Taxation has determined that a complexity analysis is not
required under section 4022(b) of the IRS Reform Act because
the bill contains no provisions that amend the Internal Revenue
Code of 1986 and that have ``widespread applicability'' to
individuals or small businesses, within the meaning of the
rule.
F. Duplication of Federal Programs
In compliance with clause 3(c)(5) of Rule XIII of the Rules
of the House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes: (1) a
program of the Federal Government known to be duplicative of
another Federal program; (2) a program included in any report
from the Government Accountability Office to Congress pursuant
to section 21 of Public Law 111-139; or (3) a program related
to a program identified in the most recent Catalog of Federal
Domestic Assistance, published pursuant to the Federal Program
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No.
98-169).
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
A. Changes in Existing Law Proposed by the Bill, as Reported
With respect to the requirement of clause 3 of rule XIII of
the Rules of the House of Representatives, the bill, as
reported, does not propose to repeal or amend a statute or part
thereof.
VII. DISSENTING VIEWS
H.R. 3800 (Rep. Wenstrup, R-OH; Rep. Blumenauer, D-OR)
would codify the 2019 United States Department of the Treasury
(Treasury) guidance relating to the section 223 of the Internal
Revenue Code (IRC) safe harbor for the provision of specified
low-cost chronic care services under the deductible in high
deductible health plans (HDHPs). This bill would codify the 14
specific preventive services described in the Treasury guidance
as allowable under the deductible without impacting the health
savings account (HSA) eligibility of such HDHP plan.
Democrats have advanced laws to improve access to
preventive care. Democrats have long championed efforts to
ensure Americans can gain access to the care that they need at
an affordable cost. The Affordable Care Act (ACA) guarantees
access to copay-free preventive services across all types of
comprehensive insurance coverage, benefitting nearly 152
million Americans. Republicans, on the other hand, have worked
to repeal the ACA and, failing that, have used litigation to
unravel the ACA. Specifically, Republican initiatives are
challenging the ACA preventive care protections for millions of
Americans in court. It is no surprise however, that while
Republicans claim they now support preventive benefits, it is
only in the guise of furthering HSAs as retirement--not
health--vehicles.
HDHPs and HSAs are not the solution. Studies have
repeatedly demonstrated that high out-of-pocket costs imposed
by HDHPs result in consumers delaying or neglecting necessary
care, rather than heightening access to care. In fact,
according to a Commonwealth Fund study, nearly 45 percent of
adults with high out-of-pocket expenses push off or forgo
health care services altogether. HDHP enrollees even forgo
needed preventive screenings that are at no-cost under the
Affordable Care Act. By attempting to add additional services
covered under the deductible for HDHPs, individuals might be
further incentivized to enroll in a plan that ultimately
provides insufficient coverage and abstain from needed medical
care.
HDHPs and HSAs are a wealth, rather than a health, vehicle.
Republicans claim that HDHPs allow consumers to be smarter
shoppers in the health care market. This, in practice, is not
the case. A study of health care price transparency in New
Hampshire found small decreases in costs in the short term that
were erased in the long term.\1\ Another study found that when
large employers provide transparent costs to their employees,
there were no costs savings, even when those employees had
HDHPs.
---------------------------------------------------------------------------
\1\Glied S. Price Transparency--Promise and Peril. JAMA.
2021;325(15):1496-1497. doi:10.1001/jama.2021.4640.
---------------------------------------------------------------------------
Furthermore, such flexibility is only granted for the
wealthy, who can afford to pay high health care costs out of
pocket and who have the means to contribute to future health
care expenses by means of HSAs. Meanwhile, middle-income or
uninsured Americans cannot afford to cover high out-of-pocket
costs, with half of Americans being unable to afford an
unexpected $500 medical bill, and with Black, Hispanic, and
female Americans as more likely not to be able to afford the
bill. Adding the option for coverage of additional items pre-
deductible merely reduces the number of qualified expenses that
HSAs can be used for, making them more of a retirement vehicle
than a health vehicle.
Expanded safe harbors for HSAs is part of a coordinated
approach to promote these tax shelters for the wealthy. This is
merely one of many bills that Republicans have brought forth to
expand or codify pre-existing safe harbors under section
223(c)(2)(c) of the IRC to allow for additional services
covered pre-deductible for HDHPs, and it is part of a
coordinated strategy to make HSAs more attractive as retirement
vehicles.
This bill ultimately will benefit the wealthiest among us,
by eliminating services that individuals have to spend their
HSA balances on, and instead augmenting the amount of triple
tax preferred savings they can contribute to non-health
expenses.
Richard E. Neal,
Ranking Member.
SUPPLEMENTAL VIEWS
One of the key challenges in reforming the health care
system is finding solutions that lower the cost of health care
while improving patients' health. I don't believe we need to
necessarily spend more on health care but spend it more wisely
to make the correct investments in prevention. 6 in 10 adults
in America struggle with chronic disease and chronic disease is
the leading cause of disease and disability in the United
States. Preventive care services could save over 100,000 lives
every year. Making investments in preventive care can lower our
health care spending--something we're going to have to take on
if we want to be serious about lowering the deficit.
This bipartisan legislation takes aim at that by codifying
an IRS guidance that expands the safe harbor for high
deductible health plans to 14 preventive care services. These
are services that are shown to be low-cost, high value services
that will prevent the exacerbation of chronic conditions. These
conditions are manageable, and we should be taking every
opportunity to structure our insurance plans in a way that
increase prevention and management.
I understand and welcome a discussion about the role of
health savings accounts in our health care system. But the fact
of the matter is that more and more employers are electing to
offer this type of coverage and we should be making sure that
they work as well as they can. And I would welcome the
opportunity to make sure we're improving coverage of chronic
disease services across our health care system and especially
in our federal programs. I urge my colleagues to support this
bipartisan legislation.
Earl Blumenauer.