Bill Summary
This bill, titled the "Family First Medisave Empowerment Act", aims to consolidate health accounts into Medisave Accounts and make other changes to the Internal Revenue Code of 1986. It includes provisions for tax treatments, limitations on contributions, and indexing for future years. It also introduces a tax credit for contributions to Medisave accounts and allows for an alternative waiver for state innovation and cost-sharing reduction payments. Additionally, it establishes a grant program for activities related to Medisave accounts.
Possible Impacts
1. Families will benefit from the legislation by being able to consolidate their health accounts into Medisave accounts and receive tax benefits for qualified medical expenses. This will make it easier for families to manage their healthcare expenses.
2. Individuals will be able to receive a tax credit for contributions made to their Medisave account within the first year of the Act's enactment, providing financial assistance for healthcare expenses. This credit is also refundable and applicable to households with incomes up to 400 percent of the poverty line.
3. Eligible entities will receive grants to assist with activities related to Medisave accounts, such as distributing information and facilitating enrollment. This will help raise awareness and make it easier for individuals to access and utilize their Medisave accounts.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8473 Introduced in House (IH)]
<DOC>
116th CONGRESS
2d Session
H. R. 8473
To amend the Internal Revenue Code of 1986 to consolidate health
accounts into Medisave Accounts, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 1, 2020
Mr. Gonzalez of Ohio (for himself and Mr. Westerman) introduced the
following bill; which was referred to the Committee on Ways and Means,
and in addition to the Committee on Energy and Commerce, for a period
to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to consolidate health
accounts into Medisave Accounts, and for other purposes.
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 ``Family First Medisave Empowerment
Act''.
SEC. 2. MEDISAVE ACCOUNTS.
(a) In General.--Part VIII of subchapter F of chapter 1 of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new section:
``SEC. 530A. MEDISAVE ACCOUNTS.
``(a) Medisave Account.--For purposes of this section--
``(1) In general.--The term `Medisave account' means a
trust created or organized in the United States as a Medisave
account exclusively for the purpose of paying the qualified
medical expenses of the account beneficiary, but only if the
written governing instrument creating the trust meets the
following requirements:
``(A) Except in the case of a rollover contribution
described in subparagraph (A) or (B) of subsection
(e)(5), no contribution will be accepted--
``(i) unless it is in cash,
``(ii) to the extent such contribution,
when added to previous contributions to the
trust for the calendar year, exceeds the
limitation amount specified in subsection
(b)(1), or
``(iii) to the extent such contribution,
when added to the balance of the account,
exceeds the limitation amount specified in
subsection (b)(2).
``(B) The trustee is a bank (as defined in section
408(n)), an insurance company (as defined in section
816), or another person who demonstrates to the
satisfaction of the Secretary that the manner in which
such person will administer the trust will be
consistent with the requirements of this section.
``(C) No part of the trust assets will be invested
in life insurance contracts.
``(D) The assets of the trust will not be
commingled with other property except in a common trust
fund or common investment fund.
``(E) The interest of an individual in the balance
in his account is nonforfeitable.
``(2) Qualified medical expenses.--
``(A) In general.--The term `qualified medical
expenses' means, with respect to an account
beneficiary, amounts paid by such beneficiary for
medical care, but only to the extent such amounts are
not compensated for by insurance or otherwise--
``(i) for--
``(I) such individual,
``(II) the spouse of such
individual,
``(III) any dependent (as defined
in section 152, determined without
regard to subsections (b)(1), (b)(2),
and (d)(1)(B) thereof) of such
individual, and
``(IV) any individual who bears a
relationship to the account beneficiary
that is described in subparagraph (C)
or (D) of section 152(d) if the account
beneficiary is or was a dependent of
such individual for any taxable year
ending before or with the taxable year
in which the individual attained 18
years of age, and
``(ii) if, on the date such medical care
was provided, such individual, spouse or
dependent to whom such care was provided was
covered under the qualified health insurance of
the account beneficiary.
``(B) Modified definition of medical care.--For
purposes of subparagraph (A), the term `medical care'
has the meaning given such term by section 213(d),
except that such term includes--
``(i) direct pay arrangements with primary
physicians, and
``(ii) predetermined level of access to
care from an integrated health plan.
``(3) Account beneficiary.--The term `account beneficiary'
means the individual on whose behalf the Medisave account was
established.
``(4) Certain rules to apply.--Rules similar to the
following rules shall apply for purposes of this section:
``(A) Section 219(d)(2) (relating to no deduction
for rollovers).
``(B) Section 219(f)(3) (relating to time when
contributions deemed made).
``(C) Except as provided in section 106(d), section
219(f)(5) (relating to employer payments).
``(D) Section 408(g) (relating to community
property laws).
``(E) Section 408(h) (relating to custodial
accounts).
``(b) Limitations.--
``(1) Annual limitation.--
``(A) In general.--The limitation amount specified
in this paragraph is--
``(i) $10,000 in the case of a qualified
health plan with an actuarial value of less
than 55 percent,
``(ii) $8,600 in the case of a qualified
health plan with an actuarial value that is 55
percent or more and less than 65 percent, and
``(iii) $7,200 in the case of a qualified
health plan with an actuarial value that is 65
percent or more.
``(B) Actuarial value of qualified health plan.--
For purposes of subparagraph (A), the actuarial value
of a qualified health plan is the percentage of the
total average costs of covered benefits under the
health plan.
``(2) Account accumulation limitation.--The limitation
amount specified in this paragraph is $50,000.
``(3) Indexing.--
``(A) In general.--In the case of any taxable year
beginning in a calendar year after 2020, each dollar
amount contained in paragraph (1)(A) shall be increased
by the medical care cost adjustment of such amount for
such calendar year.
``(B) Medical care cost adjustment.--For purposes
of subparagraph (A), the medical care cost adjustment
for any calendar year is the percentage (if any) by
which--
``(i) the medical care component of the C-
CPI-U (as defined in section 1(f)(6)) for
August of the preceding calendar year, exceeds
``(ii) such component of the C-CPI-U (as so
defined) for August of 2019.
``(C) Rounding.--
``(i) Annual limitation.--If any increase
in a dollar amount contained in paragraph
(1)(A) determined under subparagraph (A) is not
a multiple of $100, such increase shall be
rounded to the nearest multiple of $100.
``(ii) Account limitation.--If any increase
in the dollar amount contained in paragraph (2)
determined under subparagraph (A) is not a
multiple of $1,000, such increase shall be
rounded to the nearest multiple of $1,000.
``(4) Coordination with other contributions.--The
limitation which would (but for this paragraph) apply under
paragraphs (1) and (2) to an individual for any taxable year
shall be reduced (but not below zero) by the sum of--
``(A) the aggregate amount contributed to Medisave
accounts of such individual which is excludable from
the taxpayer's gross income for such taxable year under
section 106(d), and
``(B) the aggregate amount contributed to Medisave
accounts of such individual for such taxable year under
section 408(d)(9).
``(5) Deposit of advance premium tax credit.--An account
beneficiary who is eligible for an advance payment of the
premium tax credit may elect to have the Secretary deposit the
advance payment into the Medisave account of the account
beneficiary.
``(c) Definitions and Special Rules.--For purposes of this
section--
``(1) Eligible individual.--
``(A) In general.--The term `eligible individual'
means, with respect to any month, any individual if
such individual is covered under a qualified health
plan as of the 1st day of such month.
``(B) Certain coverage disregarded.--Subparagraph
(A) shall be applied without regard to--
``(i) coverage for any benefit provided by
permitted insurance, and
``(ii) coverage (whether through insurance
or otherwise) for accidents, disability, dental
care, vision care, or long-term care.
``(C) Special rule for individuals eligible for
certain veterans benefits.--An individual shall not
fail to be treated as an eligible individual for any
period merely because the individual receives hospital
care or medical services under any law administered by
the Secretary of Veterans Affairs for a service-
connected disability (within the meaning of section
101(16) of title 38, United States Code).
``(2) Qualified health plan.--
``(A) In general.--The term `qualified health plan'
means a health plan that offers health insurance
coverage. Such term includes entitlement to benefits
under title XVIII or title XIX of the Social Security
Act.
``(B) Exclusion of certain plans.--Such term does
not include a health plan if substantially all of its
coverage is disregarded under paragraph (1)(B).
``(C) Health insurance coverage.--The term `health
insurance coverage' means benefits consisting of
medical care (provided directly, through insurance or
reimbursement, or otherwise and including items and
services paid for as medical care) under any hospital
or medical service policy or certificate, hospital or
medical service plan contract, or health maintenance
organization contract offered by a health insurance
issuer.
``(D) Health insurance issuer.--The term `health
insurance issuer' means an insurance company, insurance
service, or insurance organization (including a health
maintenance organization) which is licensed to engage
in the business of insurance in a State and which is
subject to State law which regulates insurance (within
the meaning of section 514(b)(2) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1144(b)(2)).
``(E) Health maintenance organization.--The term
`health maintenance organization' means--
``(i) a Federally qualified health
maintenance organization (as defined in section
1301(a) of the Public Health Service Act (42
U.S.C. 300e(a)),
``(ii) an organization recognized under
State law as a health maintenance organization,
or
``(iii) a similar organization regulated
under State law for solvency in the same manner
and to the same extent as such a health
maintenance organization.
``(3) Permitted insurance.--The term `permitted insurance'
means--
``(A) insurance if substantially all of the
coverage provided under such insurance relates to--
``(i) liabilities incurred under workers'
compensation laws,
``(ii) tort liabilities,
``(iii) liabilities relating to ownership
or use of property, or
``(iv) such other similar liabilities as
the Secretary may specify by regulations,
``(B) insurance for a specified disease or illness,
and
``(C) insurance paying a fixed amount per day (or
other period) of hospitalization.
``(4) Family coverage.--The term `family coverage' means
any coverage other than self-only coverage.
``(d) Tax Treatment of Accounts.--
``(1) In general.--A Medisave account is exempt from
taxation under this subtitle unless such account has ceased to
be a Medisave account. Notwithstanding the preceding sentence,
any Medisave account is subject to the taxes imposed by section
511 (relating to imposition of tax on unrelated business income
of charitable, etc. organizations).
``(2) Account terminations.--Rules similar to the rules of
paragraphs (2) and (4) of section 408(e) shall apply to
Medisave accounts, and any amount treated as distributed under
such rules shall be treated as not used to pay qualified
medical expenses.
``(e) Tax Treatment of Distributions.--
``(1) Amounts used for qualified medical expenses.--Any
amount paid or distributed out of a Medisave account which is
used exclusively to pay qualified medical expenses of any
account beneficiary shall not be includible in gross income.
``(2) Inclusion of amounts not used for qualified medical
expenses.--Any amount paid or distributed out of a Medisave
account which is not used exclusively to pay the qualified
medical expenses of the account beneficiary shall be included
in the gross income of such beneficiary.
``(3) Excess contributions returned before due date of
return.--
``(A) In general.--If any excess contribution is
contributed for a taxable year to any Medisave account
of an individual, paragraph (2) shall not apply to
distributions from the Medisave accounts of such
individual (to the extent such distributions do not
exceed the aggregate excess contributions to all such
accounts of such individual for such year) if--
``(i) such distribution is received by the
individual on or before the last day prescribed
by law (including extensions of time) for
filing such individual's return for such
taxable year, and
``(ii) such distribution is accompanied by
the amount of net income attributable to such
excess contribution.
Any net income described in clause (ii) shall be
included in the gross income of the individual for the
taxable year in which it is received.
``(B) Excess contribution.--For purposes of
subparagraph (A), the term excess contribution means
any contribution (other than a rollover contribution
described in paragraph (5)) which exceeds the
limitations specified in subsection (b).
``(4) Additional tax on distributions not used for
qualified medical expenses.--
``(A) In general.--The tax imposed by this chapter
on the account beneficiary for any taxable year in
which there is a payment or distribution from a
Medisave account of such beneficiary which is
includible in gross income under paragraph (2) shall be
increased by 20 percent of the amount which is so
includible.
``(B) Exception for disability or death.--
Subparagraph (A) shall not apply if the payment or
distribution is made after the account beneficiary
becomes disabled within the meaning of section 72(m)(7)
or dies.
``(5) Rollover contribution.--
``(A) In general.--An amount is described in this
subparagraph as a rollover contribution if it meets the
requirements of clauses (i) and (ii).
``(i) In general.--Paragraph (2) shall not
apply to any amount paid or distributed from a
Medisave account to the account beneficiary to
the extent the amount received is paid into a
Medisave account for the benefit of such
beneficiary not later than the 60th day after
the day on which the beneficiary receives the
payment or distribution.
``(ii) Limitation.--This paragraph shall
not apply to any amount described in clause (i)
received by an individual from a Medisave
account if, at any time during the 1-year
period ending on the day of such receipt, such
individual received any other amount described
in clause (i) from a Medisave account which was
not includible in the individual's gross income
because of the application of this paragraph.
``(B) Rollover from fsa, archer msa, and hsa.--An
amount is described in this subparagraph for a calendar
year as a rollover contribution if the amount is the
remaining balance in a flexible spending account,
Archer MSA, or health savings account that is
contributed to the Medisave account for a taxable year
ending on or before one year after the date of the
enactment of the Family First Medisave Empowerment Act.
``(6) Coordination with medical expense deduction.--For
purposes of determining the amount of the deduction under
section 213, any payment or distribution out of a Medisave
account for qualified medical expenses shall not be treated as
an expense paid for medical care.
``(7) Transfer of account incident to divorce.--The
transfer of an individual's interest in a Medisave account to
an individual's spouse or former spouse under a divorce or
separation instrument described in clause (i) of section
121(d)(3)(C) shall not be considered a taxable transfer made by
such individual notwithstanding any other provision of this
subtitle, and such interest shall, after such transfer, be
treated as a Medisave account with respect to which such spouse
is the account beneficiary.
``(8) Treatment after death of account beneficiary.--
``(A) Treatment if designated beneficiary is
spouse.--If the account beneficiary's surviving spouse
acquires such beneficiary's interest in a Medisave
account by reason of being the designated beneficiary
of such account at the death of the account
beneficiary, such Medisave account shall be treated as
if the spouse were the account beneficiary.
``(B) Other cases.--
``(i) In general.--If, by reason of the
death of the account beneficiary, any person
acquires the account beneficiary's interest in
a Medisave account in a case to which
subparagraph (A) does not apply--
``(I) such account shall cease to
be a Medisave account as of the date of
death, and
``(II) an amount equal to the fair
market value of the assets in such
account on such date shall be
includible if such person is not the
estate of such beneficiary, in such
person's gross income for the taxable
year which includes such date, or if
such person is the estate of such
beneficiary, in such beneficiary's
gross income for the last taxable year
of such beneficiary.
``(ii) Special rules.--
``(I) Reduction of inclusion for
predeath expenses.--The amount
includible in gross income under clause
(i) by any person (other than the
estate) shall be reduced by the amount
of qualified medical expenses which
were incurred by the decedent before
the date of the decedent's death and
paid by such person within 1 year after
such date.
``(II) Deduction for estate
taxes.--An appropriate deduction shall
be allowed under section 691(c) to any
person (other than the decedent or the
decedent's spouse) with respect to
amounts included in gross income under
clause (i) by such person.
``(f) Reports.--The Secretary may require--
``(1) the trustee of a Medisave account to make such
reports regarding such account to the Secretary and to the
account beneficiary with respect to contributions,
distributions, the return of excess contributions, and such
other matters as the Secretary determines appropriate, and
``(2) any person who provides an individual with a
qualified health plan to make such reports to the Secretary and
to the account beneficiary with respect to such plan as the
Secretary determines appropriate.
The reports required by this subsection shall be filed at such time and
in such manner and furnished to such individuals at such time and in
such manner as may be required by the Secretary.
``(g) Regulations and Guidance.--For purposes of this section, the
Secretary shall prescribe such regulations or other guidance as the
Secretary determines necessary or appropriate to carry out this
section, including regulations or guidance on the methods acceptable to
the Secretary for determining qualified health plan actuarial value.''.
(b) Treatment of Employer Payments.--
(1) Exclusion limited to self-funded major medical plan of
employers.--Section 105(b) of such Code is amended by striking
``paid,'' and inserting ``paid under a self-funded major
medical plan of the employer''.
(2) Exclusion not applicable to health reimbursement
arrangements.--Subsection (h) of such Code is amended to read
as follows:
``(h) Exclusion Not Applicable to Health Reimbursement
Arrangements.--Subsection (b) shall not apply to health reimbursement
arrangements.''.
(3) Repeal of exclusions from income for archer msas, fsas,
and hsas.--
(A) In general.--Section 106 of such Code is
amended--
(i) by striking subsections (b), (d), and
(e), and
(ii) by redesignating subsections (f) and
(g) as subsections (d) and (e), respectively.
(B) Exclusion from income for medisave accounts.--
Section 106 of such Code, as amended by subparagraph
(A), is amended by inserting after subsection (a) the
following:
``(b) Contributions to Medisave Accounts.--
``(1) In general.--In the case of an employee who is an
eligible individual (as defined in section 530A(c)(1)), amounts
contributed by such employee's employer to any Medisave account
(as defined in section 530A(a)) of such employee shall be
treated as employer-provided coverage for medical expenses
under an accident or health plan to the extent such amounts do
not exceed the limitations specified in clauses (ii) and (iii)
of section 530A(a)(1)(A) (determined without regard to this
subsection) which is applicable to such employee for such
taxable year.
``(2) No constructive receipt.--No amount shall be included
in the gross income of any employee solely because the employee
may choose between the contributions referred to in paragraph
(1) and employer contributions to another health plan of the
employer.
``(3) Special rule for deduction of employer
contributions.--Any employer contribution to a Medisave
account, if otherwise allowable as a deduction under this
chapter, shall be allowed only for the taxable year in which
paid.
``(4) Employer medisave account contributions required to
be shown on return.--Every individual required to file a return
under section 6012 for the taxable year shall include on such
return the aggregate amount contributed by employers to the
Medisave accounts of such individual or such individual's
spouse for such taxable year.
``(5) Medisave account contributions not part of cobra
coverage.--Paragraph (1) shall not apply for purposes of
section 4980B.
``(6) Cross reference.--For penalty on failure by employer
to make comparable contributions to the Medisave accounts of
comparable employees, see section 4980G.''.
(4) Distribution from certain retirement accounts for
medisave account funding.--Section 408(d)(9) of such Code is
amended to read as follows:
``(9) Distribution for medisave account funding.--
``(A) In general.--In the case of an individual who
is an eligible individual (as defined in section
530A(c)(1)) and who elects the application of this
paragraph for a taxable year, gross income of the
individual for the taxable year does not include a
qualified Medisave account funding distribution to the
extent such distribution is otherwise includible in
gross income.
``(B) Qualified medisave account funding
distribution.--For purposes of this paragraph, the term
`qualified Medisave account funding distribution' means
a distribution from an individual retirement plan
(other than a plan described in subsection (k) or (p))
of the employee to the extent that--
``(i) such distribution is contributed to
the Medisave account of the individual in a
direct trustee-to-trustee transfer, and
``(ii) such distribution--
``(I) when added to previous
contributions to the Medisave account
for the calendar year does not exceed
the limitation amount specified in
section 530A(b)(1), and
``(II) when added to the balance of
the Medisave account, exceeds the
limitation amount specified in section
530A(b)(2).
``(C) One-time transfer.--An individual may make an
election under subparagraph (A) only for one qualified
Medisave account funding distribution during the
lifetime of the individual. Such an election, once
made, shall be irrevocable.
``(D) Application of section 72.--Notwithstanding
section 72, in determining the extent to which an
amount is treated as otherwise includible in gross
income for purposes of subparagraph (A), the aggregate
amount distributed from an individual retirement plan
shall be treated as includible in gross income to the
extent that such amount does not exceed the aggregate
amount which would have been so includible if all
amounts from all individual retirement plans were
distributed. Proper adjustments shall be made in
applying section 72 to other distributions in such
taxable year and subsequent taxable years.''.
(5) Failure of employer to make comparable contributions.--
(A) Section 4980G(a) of such Code is amended by
striking ``health savings account'' and inserting
``Medisave account''.
(B) Section 4980G(c) of such Code is amended by
striking ``Archer MSAs and health savings accounts''
and inserting ``Medisave accounts''.
(6) W-2 statements.--Section 6051(a) of such Code is
amended--
(A) by striking paragraph (11) and redesignating
paragraphs (12) through (17) as paragraphs (11) through
(16), respectively, and
(B) by amending paragraph (11), as so redesignated,
to read as follows:
``(11) the amount contributed to any Medisave account (as
defined in section 530A) of such employee or such employee's
spouse,''.
(c) Other Conforming Amendments.--
(1) Archer msas.--Section 220(a) of such Code is amended by
adding at the end the following: ``No amount is allowed as a
deduction under the preceding sentence for any taxable year
beginning after one year after the date of the enactment of
Family First Medisave Empowerment Act.''.
(2) Health savings accounts.--Section 223(a) of such Code
is amended by adding at the end the following: ``No amount is
allowed as a deduction under the preceding sentence for any
taxable year beginning after one year after the date of the
enactment of the Family First Medisave Empowerment Act.''.
(d) Rollover of FSA, Archer MSA, HSA to Medisave Account.--
Notwithstanding any other provision of law, if the remaining balance in
a health flexible spending arrangement, Archer MSA, or Health Savings
Account is transferred to a Medisave account before the end of any
taxable year ending on or before one year after the date of the
enactment of the Family First Medisave Empowerment Act, such transfer
shall be treated as a rollover to the Medisave account under section
530A(e)(5)(B) of the Internal Revenue Code of 1986 and the distribution
from the health flexible spending arrangement, Archer MSA, or Health
Savings Account shall not be includible in gross income.
(e) Clerical Amendments.--The table of sections for part VIII of
subchapter F of chapter 1 of such Code is amended by adding at the end
the following new item:
``Sec. 530A. Medisave Accounts.''.
(f) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after one year after the date of the
enactment of this Act.
SEC. 3. TAX CREDIT FOR CONTRIBUTIONS TO MEDISAVE ACCOUNT DURING FIRST
YEAR.
(a) In General.--In the case of an individual who makes a
contribution to a Medisave account before the end of the 1-year period
beginning on the date of the enactment of this Act, there shall be
allowed as a credit against the tax imposed by subtitle A of the
Internal Revenue Code of 1986 for the taxable year in which the
contribution is made an amount equal to the aggregate of $1 for every
$3 contributed to the account (other than a rollover contribution under
section 530A(e)(5) of such Code) for such taxable year.
(b) Limitation.--The aggregate amount allowed to an individual as a
credit under subsection (a) for all taxable years shall not exceed
$1,000.
(c) Portion of Credit Refundable.--For purposes of this section--
(1) In general.--For purposes of the Internal Revenue Code
of 1986, in the case of an eligible individual--
(A) Increase in credit rate.--Subsection (a) shall
be applied by substituting ``$1 for every $1
contributed'' for ``$1 for every $3 contributed''.
(B) Credit refundable.--The credit allowed under
this section shall be treated in the same manner as a
credit allowed under subpart C of part IV of subchapter
A of chapter 1 of such Code.
(2) Eligible individual.--
(A) In general.--The term ``eligible individual''
means, with respect to any taxable year, a taxpayer
whose household income for the taxable year does not
exceeds 400 percent of an amount equal to the poverty
line for a family of the size involved.
(B) Married couples must file joint return.--If the
taxpayer is married (within the meaning of section 7703
of such Code) at the close of the taxable year--
(i) the taxpayer shall be treated as an
eligible individual only if the taxpayer and
the taxpayer's spouse file a joint return for
the taxable year, and
(ii) paragraph (1) shall be applied
separately to each spouse.
(3) Family size, household income, modified adjusted gross
income, poverty line.--The terms ``family size'', ``household
income'', ``modified adjusted gross income'', and ``poverty
line'' have the meaning given such terms by section 36B(d) of
such Code.
(d) Denial of Credit to Dependents.--No credit shall be allowed
under this section to any individual with respect to whom a deduction
under section 151 is allowable to another taxpayer for a taxable year
beginning in the calendar year in which such individual's taxable year
begins.
SEC. 4. ALTERNATIVE WAIVER FOR STATE INNOVATION; COST-SHARING REDUCTION
PAYMENTS.
(a) Alternative Waiver for State Innovation.--Section 1332 of the
Patient Protection and Affordable Care Act (42 U.S.C. 18052) is amended
by adding at the end the following new subsection:
``(f) Alternative Waiver for State Innovation.--
``(1) In general.--Notwithstanding any preceding provision
of this section, a State may apply to the Secretary for the
waiver of any requirement of subsection (a)(2) with respect to
health insurance coverage within that State for plan years
beginning on or after January 1, 2022, if instead of complying
with section 1402 the State provides for the distribution of
funding received under paragraph (2) to Medisave accounts of
qualifying individuals with respect to such State. Such
application shall be filed at such time and in such manner as
the Secretary may require, and shall include such information
as the Secretary may require (including a 10-year budget plan
for such plan that is budget neutral for the Federal
Government).
``(2) Pass-through funding.--With respect to a State waiver
under paragraph (1), under which, due to the structure of such
waiver, individuals in the State would not qualify for cost-
sharing reductions under section 1402 for which they would
otherwise be eligible, the Secretary shall provide for an
alternative means by which an amount is transferred to the
State equal to the aggregate amount of such reductions that
would have been paid on behalf of the participants in the
Exchanges established under this title--
``(A) had the State not received such waiver;
``(B) had references to `eligible insureds' under
section 1402 referred to `qualifying insureds (as
defined in section 1332(f))'; and
``(C) had, after application of clause (ii), in the
case of a qualifying insured enrolled in the bronze
level of coverage--
``(i) the percentages specified in
subclauses (I), (II), and (III) of section
1402(c)(1)(B) were references to 84 percent, 77
percent, and 63 percent, respectively; and
``(ii) the references in subparagraphs (A),
(B), and (C) of section 1402(c)(2) to 94
percent, 87 percent, and 73 percent,
respectively, were references to 84 percent, 77
percent, and 63 percent, respectively.
The amount transferred pursuant to the previous sentence shall
be determined annually by the Secretary, taking into
consideration the experience of other States with respect to
participation in an Exchange and reductions provided under such
provisions to residents of the other States, and shall be paid
to the State for purposes of implementing such waiver.
``(3) Waiver consideration and transparency.--The
provisions of paragraph (4) of subsection (a) shall apply to an
application for a waiver under paragraph (1) in the same manner
as such provisions apply with respect to an application for a
waiver under subsection (a)(1), except that, for purposes of
this paragraph, the provisions of subsection (a)(4)(B)(ii)
shall not apply.
``(4) Determinations; term of waiver.--The provisions of
subsections (d) and (e) shall apply with respect to a
determination with respect to an application under paragraph
(1), and with respect to the term of a waiver under such
paragraph, in the same manner as such provisions apply with
respect to a determination with respect to an application under
subsection (a)(1), and with respect to the term of a waiver
under such subsection.
``(5) Definitions.--For purposes of this subsection:
``(A) Medisave account.--The term `Medisave
account' has the meaning given such term in section
530A(a) of the Internal Revenue Code of 1986.
``(B) Qualifying insured.--The term `qualifying
insured' means, with respect to a State and a year, an
individual--
``(i) who is enrolled in a Medisave
account;
``(ii) who is enrolled for such year in a
silver level or bronze level coverage offered
through an Exchange; and
``(iii) whose household income is not less
than 100 percent but not more than 250 percent
of the Federal poverty line for a family of the
size involved.''.
(b) Conforming Amendments.--Section 1332 of the Patient Protection
and Affordable Care Act (42 U.S.C. 18052), as amended by subsection
(a), is further amended in subsection (a)(4)--
(1) in subparagraph (A) by striking the period and
inserting ``, except in the case of a waiver described in
subsection (f).''; and
(2) in subparagraph (B)(ii) by inserting after ``an
application'' the following: ``(except in the case of a waiver
described in subsection (f))''.
(c) Appropriation for Cost-Sharing Payments.--Section 1402 of the
Patient Protection and Affordable Care Act (42 U.S.C. 18071) is amended
by adding at the end the following new subsection:
``(g) Funding.--
``(1) Appropriations.--Out of any funds in the Treasury not
otherwise appropriated, there is appropriated such sums as may
be necessary to, subject to paragraph (2), provide health
benefits coverage through payment to issuers (under this
section or through advance payment by the Secretary of the
Treasury under section 1412(c)(3)) of the amounts computed
under this section for each of plan years 2022 through 2026.
``(2) Adjustments.--Notwithstanding any other provision of
law, payments and other actions for adjustments to obligations
incurred prior to December 31, 2022, may be made through
December 31, 2022.
``(3) Limitation.--Amounts appropriated under paragraph (1)
for each of plan years 2022 through 2026 are subject to the
requirements and limitations under sections 506 and 507 of
division H of Public Law 115-31 in the same manner and to the
same extent as if such amounts for each such year were
appropriated under such division.''.
SEC. 5. GRANTS FOR MEDISAVE ASSISTANCE AND OUTREACH.
(a) In General.--The Administrator shall establish a grant program
to provide assistance to eligible entities to carry out the activities
described in subsection (c).
(b) Application.--An eligible entity shall submit an application to
the Administrator in such time and in such manner as the Administrator
may require, providing that such application requires a demonstration
of the existence of a relationship with, or the ability to establish a
relationship with, an employer, employee, self-employed individual, or
consumer eligible to enroll in a Medisave account.
(c) Use of Funds.--An eligible entity receiving a grant under this
section shall use such funds to--
(1) distribute fair and impartial information to consumers
about Medisave accounts, including the availability of such
accounts and how such accounts may be utilized;
(2) conduct activities to raise public awareness of
Medisave accounts;
(3) facilitate enrollment in Medisave accounts; and
(4) refer individuals enrolled in a Medisave account to the
appropriate official, organization, or State agency for the
purpose of addressing a complaint, grievance, or other question
with respect to such Medisave account.
(d) Amount.--The Administrator may distribute up to $5,000,000
annually to be divided among grant recipients under this section.
(e) Report.--Not later than one year after the date on which the
last of the grant periods awarded under this section ends, the
Administrator shall submit a report to the Congress on the
effectiveness of the grants provided under this section.
(f) Definitions.--In this section:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Centers for Medicare & Medicaid Services.
(2) Consumer.--The term ``consumer'' means an individual
enrolled in, or seeking to enroll in, a Medisave account.
(3) Eligible entity.--The term ``eligible entity'' includes
the following:
(A) A State.
(B) Trade.
(C) Industry.
(D) Professional associations.
(E) Commercial fishing industry organizations.
(F) Ranching and farming organizations.
(G) Community and consumer-focused nonprofit
groups.
(H) Chambers of commerce.
(I) Unions.
(J) Small business development centers (as defined
in section 21 of the Small Business Act (15 U.S.C.
648)).
(K) Other entities capable of carrying out the
activities described under subsection (b).
(4) Medisave account.--The term ``Medisave account'' has
the meaning given such term in section 530A(a) of the Internal
Revenue Code of 1986 (as added by section 2(a)).
(5) State.--The term ``State'' means each of the several
States, the District of Columbia, each territory and possession
of the United States, and each federally recognized Indian
Tribe.
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