Proposed regs. address primary care and health sharing ministries

Yesterday, the IRS released proposed regulations addressing the treatment of certain medical care arrangements under Section 213 of the Internal Revenue Code.

Specifically, Section 213(d) of the Code allows individuals to take an itemized deduction for expenses for medical care, including insurance.

The proposed regulations address direct primary care (DPC) arrangements and health care sharing ministry (HCSM) memberships, and provide the following guidance:

  • Payments for DPC arrangements are expenses for medical care under section 213(d) of the Code. Because these payments are for medical care, an HRA provided by an employer generally may reimburse an employee for DPC arrangement payments.
  •  Payments for membership in a HCSM are expenses for medical care under section 213(d) of the Code. Because these payments are for medical care, an HRA provided by an employer generally may reimburse an employee for HCSM membership payments.

These proposed regulations are in direct response to Executive Order 13877, which directed the Secretary of the Treasury to “propose regulations to treat expenses related to certain types of arrangements as eligible medical expenses.”

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