,,ii #aaeth ,,congress #b;d ,session ,h4 ,r4 #faii ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,july #bf1 #bjah,received ,,an ,,act ,to amend the ,internal ,revenue ,code of #aihf to include certain over-the-counter medical products as qualified medical expenses4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,restoring ,access to ,medication and ,modernizing ,health ,savings ,accounts ,act of #bjah4 7b7 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4 ,sec4 #b4 ,first dollar coverage flexibility for high deductible health plans4 ,sec4 #c4 ,treatment of direct primary care service arrangements4 ,sec4 #d4 ,certain employment related services not treated as disqualifying coverage for purposes of health savings accounts4 ,sec4 #e4 ,contributions permitted if spouse has a health flexible spending account4 ,sec4 #f4 ,,fsa and ,,hra terminations or conversions to fund ,h,s,as4 ,sec4 #g4 ,inclusion of certain over-the-counter medical products as qualified medical expenses4 ,sec4 #h4 ,certain amounts paid for physical activity1 fitness1 and exercise treated as amounts paid for medical care4 #b4 ,first dollar coverage flexibility for high deductible health plans 7a7 ,in general ,section #bbc7;c77#b7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subparagraph3 7,e7 ,first dollar coverage flexibility 7i7 ,in general ,a plan shall not fail to be treated as a high deductible health plan by reason of failing to have a deductible for not more than #bej of specified services for self-only coverage 7twice such amount in the case of family coverage7 during a plan year4 7ii7 ,specified services ,for purposes of this subparagraph1 the term specified services means1 with respect to a plan1 services other than preventive care 7within the meaning of subparagraph 7,c77 identified under the terms of the plan as being services to which clause 7i7 applies4 4 7b7 ,inflation adjustment ,section #bbc7;g77#a7 of such ,code is amended-- 7#a7 by striking and 7c77#b77;,a7 each place it appears and inserting 1 7c77#b77;,a71 and 7c77#b77;,e71 and 7#b7 in subparagraph 7,b7-- 7,a7 by striking such taxable year in the matter preceding clause 7i7 and inserting the taxable year 7plan year in the case of the dollar amount in subsection 7c77#b77;,e771 and 7,b7 by striking clause 7ii7 and inserting clauses 7ii7 and 7iii7 in clause 7i71 by striking and at the end of clause 7i71 by striking the period at the end of clause 7ii7 and inserting 1 and1 and by inserting after clause 7ii7 the following new clause3 7iii7 in the case of the dollar amount in subsection 7c77#b77;,e7 for plan years beginning in calendar years after #bjai1 calendar year #bjah4 4 7c7 ,effective date ,the amendments made by this section shall apply with respect to plan years beginning after ,december #ca1 #bjah4 #c4 ,treatment of direct primary care service arrangements 7a7 ,in general ,section #bbc7;c77#a7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subparagraph3 7,d7 ,treatment of direct primary care service arrangements 7i7 ,in general ,a direct primary care service arrangement shall not be treated as a health plan for purposes of subparagraph 7,a77ii74 7ii7 ,direct primary care service arrangement ,for purposes of this paragraph-- 7,i7 ,in general ,the term direct primary care service arrangement means1 with respect to any individual1 an arrangement under which such individual is provided medical care 7as defined in section #bac7;d77 consisting solely of primary care services provided by primary care practitioners 7as defined in section #ahcc7x77#b77;,a7 of the ,social ,security ,act1 determined without regard to clause 7ii7 thereof71 if the sole compensation for such care is a fixed periodic fee4 7,,ii7 ,limitation ,with respect to any individual for any month1 such term shall not include any arrangement if the aggregate fees for all direct primary care service arrangements 7determined without regard to this subclause7 with respect to such individual for such month exceed #aej 7twice such dollar amount in the case of an individual with any direct primary care service arrangement 7as so determined7 that covers more than one individual74 7iii7 ,certain services specifically excluded from treatment as primary care services ,for purposes of this paragraph1 the term primary care services shall not include-- 7,i7 procedures that require the use of general anesthesia1 7,,ii7 prescription drugs 7other than vaccines71 and 7,,iii7 laboratory services not typically administered in an ambulatory primary care setting4 ,the ,secretary1 after consultation with the ,secretary of ,health and ,human ,services1 shall issue regulations or other guidance regarding the application of this clause4 4 7b7 ,direct primary care service arrangement fees treated as medical expenses ,section #bbc7;d77#b77;,c7 is amended by striking or at the end of clause 7iii71 by striking the period at the end of clause 7iv7 and inserting 1 or1 and by adding at the end the following new clause3 7v7 any direct primary care service arrangement4 4 7c7 ,inflation adjustment ,section #bbc7;g77#a7 of such ,code1 as amended by section #b7;b71 is amended-- 7#a7 by inserting 7c77#a77;,d77ii77,,ii71 after 7b77#b71 each place it appears1 and 7#b7 in subparagraph 7,b71 by striking and 7iii7 and inserting 1 7iii7 and 7iv7 in clause 7i71 by striking and at the end of clause 7ii71 by striking the period at the end of clause 7iii7 and inserting 1 and1 and by inserting after clause 7iii7 the following new clause3 7iv7 in the case of the dollar amount in subsection 7c77#a77;,d77ii77,,ii7 for taxable years beginning in calendar years after #bjai1 calendar year #bjah4 4 7d7 ,reporting of direct primary care service arrangement fees on ,w-#b ,section #fjea7;a7 of such ,code is amended by striking and at the end of paragraph 7#af71 by striking the period at the end of paragraph 7#ag7 and inserting 1 and1 and by inserting after paragraph 7#ag7 the following new paragraph3 7#ah7 in the case of a direct primary care service arrangement 7as defined in section #bbc7;c77#a77;,d77ii77 which is provided in connection with employment1 the aggregate fees for such arrangement for such employee4 4 7e7 ,effective date ,the amendments made by this section shall apply to months beginning after ,december #ca1 #bjah1 in taxable years ending after such date4 #d4 ,certain employment related services not treated as disqualifying coverage for purposes of health savings accounts 7a7 ,in general ,section #bbc7;c77#a7 of the ,internal ,revenue ,code of #aihf1 as amended by section #c7;a71 is amended by adding at the end the following new subparagraph3 7,e7 ,special rule for qualified items and services 7i7 ,in general ,an individual shall not be treated as covered under a health plan for purposes of subparagraph 7,a77ii7 merely because the individual1 in connection with the employment of the individual or the individual's spouse1 receives 7or is eligible to receive7 qualified items and services at-- 7,i7 a healthcare facility located at a facility owned or leased by the employer of the individual 7or of the individual's spouse71 or operated primarily for the benefit of such employer's employees1 or 7,,ii7 a healthcare facility located within a supermarket1 pharmacy1 or similar retail establishment4 7ii7 ,qualified items and services defined ,for purposes of this subparagraph1 the term qualified items and services means the following3 7,i7 ,physical examinations4 7,,ii7 ,immunizations1 including injections of antigens provided by employees4 7,,iii7 ,drugs other than a prescribed drug 7as such term is defined in section #bac7;d77#c774 7,,iv7 ,treatment for injuries occurring in the course of employment4 7,v7 ,drug testing1 if required as a condition of employment4 7,,vi7 ,hearing or vision screenings4 7,,vii7 ,other similar items and services that do not provide significant benefits in the nature of medical care4 7iii7 ,aggregation ,for purposes of clause 7i77,i71 all persons treated as a single employer under subsection 7b71 7c71 7m71 or 7o7 of section #dad shall be treated as a single employer4 4 7b7 ,effective date ,the amendments made by this section shall apply to months beginning after ,december #ca1 #bjah1 in taxable years ending after such date4 #e4 ,contributions permitted if spouse has a health flexible spending account 7a7 ,contributions permitted if spouse has a health flexible spending account ,section #bbc7;c77#a77;,b7 of the ,internal ,revenue ,code of #aihf is amended by striking and at the end of clause 7ii71 by striking the period at the end of clause 7iii7 and inserting 1 and1 and by inserting after clause 7iii7 the following new clause3 7iv7 coverage under a health flexible spending arrangement of the spouse of the individual for any plan year of such arrangement if the aggregate reimbursements under such arrangement for such year do not exceed the aggregate expenses which would be eligible for reimbursement under such arrangement if such expenses were determined without regard to any expenses paid or incurred with respect to such individual4 4 7b7 ,effective date ,the amendment made by this section shall apply to plan years beginning after ,december #ca1 #bjah4 #f4 ,,fsa and ,,hra terminations or conversions to fund ,h,s,as 7a7 ,in general ,section #ajf7;e77#b7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7#b7 ,qualified ,,hsa distribution ,for purposes of this subsection-- 7,a7 ,in general ,the term qualified ,,hsa distribution means1 with respect to any employee1 a distribution from a health flexible spending arrangement or health reimbursement arrangement of such employee directly to a health savings account of such employee if-- 7i7 such distribution is made in connection with such employee establishing coverage under a high deductible health plan 7as defined in section #bbc7;c77#b77 after a significant period of not having such coverage1 and 7ii7 such arrangement is described in section #bbc7;c77#a77;,b77iii7 with respect to the portion of the plan year after such distribution is made4 7,b7 ,dollar limitation ,the aggregate amount of distributions from health flexible spending arrangements and health reimbursement arrangements of any employee which may be treated as qualified ,,hsa distributions in connection with an establishment of coverage described in subparagraph 7,a77i7 shall not exceed the dollar amount in effect under section #abe7;i77#a7 7twice such amount in the case of coverage which is described in section #bbc7;b77#b77;,b774 4 7b7 ,partial reduction of limitation on deductible ,,hsa contributions ,section #bbc7;b77#d7 of such ,code is amended by striking and at the end of subparagraph 7,b71 by striking the period at the end of subparagraph 7,c7 and inserting 1 and1 and by inserting after subparagraph 7,c7 the following new subparagraph3 7,d7 so much of any qualified ,,hsa distribution 7as defined in section #ajf7;e77#b77 made to a health savings account of such individual during the taxable year as does not exceed the aggregate increases in the balance of the arrangement from which such distribution is made which occur during the portion of the plan year which precedes such distribution 7other than any balance carried over to such plan year and determined without regard to any decrease in such balance during such portion of the plan year74 4 7c7 ,conversion to ,,hsa-compatible arrangement for remainder of plan year ,section #bbc7;c77#a77;,b77iii7 of such ,code1 as amended by section #e7;a71 is amended to read as follows3 7iii7 coverage under a health flexible spending arrangement or health reimbursement arrangement for the portion of the plan year after a qualified ,,hsa distribution 7as defined in section #ajf7;e77#b7 determined without regard to subparagraph 7,a77ii7 thereof7 is made1 if the terms of such arrangement which apply for such portion of the plan year are such that1 if such terms applied for the entire plan year1 then such arrangement would not be taken into account under subparagraph 7,a77ii7 of this paragraph for such plan year1 and 4 7d7 ,inclusion of qualified ,,hsa distributions on ,w-#b 7#a7 ,in general ,section #fjea7;a7 of such ,code1 as amended by section #c7;d71 is amended by striking and at the end of paragraph 7#ag71 by striking the period at the end of paragraph 7#ah7 and inserting 1 and1 and by inserting after paragraph 7#ah7 the following new paragraph3 7#ai7 the amount of any qualified ,,hsa distribution 7as defined in section #ajf7;e77#b77 with respect to such employee4 4 7#b7 ,conforming amendment ,section #fjea7;a77#ab7 of such ,code is amended by inserting 7other than any qualified ,,hsa distribution1 as defined in section #ajf7;e77#b77 before the comma at the end4 7e7 ,effective date ,the amendments made by this section shall apply to distributions made after ,december #ca1 #bjah1 in taxable years ending after such date4 #g4 ,inclusion of certain over-the-counter medical products as qualified medical expenses 7a7 ,h,s,as ,section #bbc7;d77#b7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by striking the last sentence of subparagraph 7,a7 and inserting the following3 ,for purposes of this subparagraph1 amounts paid for menstrual care products shall be treated as paid for medical care41 and 7#b7 by adding at the end the following new subparagraph3 7,d7 ,menstrual care product ,for purposes of this paragraph1 the term menstrual care product means a tampon1 pad1 liner1 cup1 sponge1 or similar product used by women with respect to menstruation or other genital-tract secretions4 4 7b7 ,archer ,m,s,as ,section #bbj7;d77#b77;,a7 of such ,code is amended by striking the last sentence and inserting the following3 ,for purposes of this subparagraph1 amounts paid for menstrual care products 7as defined in section #bbc7;d77#b77;,d77 shall be treated as paid for medical care44 7c7 ,health flexible spending arrangements and health reimbursement arrangements ,section #ajf of such ,code is amended by striking subsection 7f7 and inserting the following new subsection3 7f7 ,reimbursements for menstrual care products ,for purposes of this section and section #aje1 expenses incurred for menstrual care products 7as defined in section #bbc7;d77#b77;,d77 shall be treated as incurred for medical care4 4 7d7 ,effective dates 7#a7 ,distributions from health savings accounts ,the amendments made by subsections 7a7 and 7b7 shall apply to amounts paid after ,december #ca1 #bjah4 7#b7 ,reimbursements ,the amendment made by subsection 7c7 shall apply to expenses incurred after ,december #ca1 #bjah4 #h4 ,certain amounts paid for physical activity1 fitness1 and exercise treated as amounts paid for medical care 7a7 ,in general ,section #bac7;d77#a7 of the ,internal ,revenue ,code of #aihf is amended by striking or at the end of subparagraph 7,c71 by striking the period at the end of subparagraph 7,d7 and inserting 1 or1 and by adding at the end the following new subparagraph3 7,e7 for qualified sports and fitness expenses4 4 7b7 ,qualified sports and fitness expenses ,section #bac7;d7 of such ,code is amended by adding at the end the following paragraph3 7#ab7 ,qualified sports and fitness expenses 7,a7 ,in general ,the term qualified sports and fitness expenses means amounts paid for-- 7i7 membership at a fitness facility1 7ii7 participation or instruction in a program of qualified physical activity1 or 7iii7 safety equipment for use in a program 7including a self-directed program7 of qualified physical activity4 7,b7 ,limitations 7i7 ,overall dollar limitation ,the aggregate amount treated as qualified sports and fitness expenses with respect to any taxpayer for any taxable year shall not exceed #ejj 7twice such amount in the case of a joint return or a head of household 7as defined in section #b7;b7774 7ii7 ,dollar limitation on safety equipment ,the amount treated as qualified sports and fitness expenses with respect to any item of safety equipment described in subparagraph 7,a77iii7 shall not exceed #bej4 7iii7 ,exclusion of exercise videos1 etc ,qualified sports and fitness expenses shall not include videos1 books1 or similar materials4 7,c7 ,qualified physical activity ,for purposes of this paragraph-- 7i7 ,in general ,except as provided in clause 7ii71 the term qualified physical activity means any physical exercise or physical activity4 7ii7 ,exclusions ,the ,secretary1 after consultation with the ,secretary of ,health and ,human ,services1 shall issue guidance to determine for purposes of this paragraph what does not constitute a qualified physical activity1 including golf1 hunting1 sailing1 horseback riding1 and other similar activities4 7,d7 ,fitness facility defined ,for purposes of subparagraph 7,a77i71 the term fitness facility means a facility-- 7i7 providing instruction in a program of qualified physical activity or facilities for qualified physical activity1 7ii7 which is not a private club owned and operated by its members1 7iii7 whose health or fitness facility is not incidental to its overall function and purpose1 and 7iv7 which is fully compliant with applicable ,state and ,federal anti-discrimination laws4 7,e7 ,programs which include components other qualified physical activity ,rules similar to the rules of paragraph 7#f7 shall apply in the case of any program or facility that includes qualified physical activity 7or facilities therefore7 and also other components4 ,for purposes of the preceding sentence1 travel and accommodations shall be treated as an other component4 7,f7 ,inflation adjustment ,in the case of any taxable year beginning in a calendar year after #bjai1 the #ejj amount in subparagraph 7,b77i7 and the #bej amount in subparagraph 7,b77ii7 shall each be increased by an amount equal to-- 7i7 such dollar amount1 multiplied by 7ii7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which such taxable year begins1 determined by substituting calendar year #bjah for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 ,if any increase determined under the preceding sentence is not a multiple of #aj1 such increase shall be rounded to the next lowest multiple of #aj4 4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjah4 ,passed the ,house of ,representatives ,july #be1 #bjah4,karen ,l4 ,haas1,clerk