The Presidential Executive Order on Price and Quality Transparency:
What does it mean for DPC?
On Monday June 24th, the President signed a new Executive Order on Improving Price and Quality Transparency which urges the Secretary of the Treasury to act within the extent of the law possible to propose regulations that would potentially clarify that DPC expenses are qualified health expenses under 213(d) of the Internal Revenue Code (IRC).
The Direct Primary Care Coalition is very pleased that the Administration has formally urged Treasury to consider proposing regulation to clarify direct primary care arrangements under IRC section 213(d).
This is an important development signaling the Administration’s ongoing support for DPC. It’s important to note, however, that the Executive Order alone, without further action by the Treasury or Congress does not change any current IRS policy or guidance regarding DPC.
The rule provides the agency with direction and authority from the President to begin a regulatory process which may, at its conclusion, result in some favorable policy change. We will continue to work closely with the Administration and the Treasury Department as potential rules are developed.
The scope of these potential regulations does not appear to address the issue under 223 (c) of the IRC that currently prohibits individuals with health savings accounts (HSA) from funding their HSA when they have a DPC arrangement. Treasury has insisted in the past that Congress also needs to act to make changes to IRC Section 223 (c) to clarify this prohibition to make DPC fully compatible with HSAs.
The Executive Order shows that there is bipartisan support both in Congress and at the White House to ultimately make the changes needed to the tax code to clarify that DPC agreements can be used with HSAs without making the HSA holder ineligible.
What does the Executive Order Actually Say?
The language states that: “Within 180 days... the Secretary of the Treasury, to the extent consistent with law, shall propose regulations to treat expenses related to certain types of arrangements, potentially including direct primary care arrangements and healthcare sharing ministries, as eligible medical expenses under section 213(d) of title 26, United States Code.”
The DPC Coalition will be working closely with the Administration and Congress as the proposal moves forward. It’s important to make sure that these new developments don’t impede our efforts to work in a bipartisan effort to pass legislation to make these changes to the tax code a permanent part of the law.