YourVoice.Now Summary
Your MoneyWorkers & JobsAnyone could save $12,000 a year tax-free for health costs — but future hires would be taxed on job health plans.
Your Money
Today you can only open one of these accounts if you carry a high-deductible health plan. The bill would drop that rule, so anyone could open one and deduct what they put in.
The bill sets the yearly cap at $12,000, and twice that on a joint tax return. Today's caps sit in tax law, are adjusted each year for inflation, and are far lower.
People who turn 55 before the year ends could add $5,000 on top of the regular limit. Today the law allows $1,000.
Today the account cannot pay health insurance premiums, apart from a few cases such as COBRA or long-term care. The bill would drop that limit. It would also add direct primary care, health care sharing ministries, and medical cost sharing groups.
Today you must stop putting money in the month you become entitled to Medicare. The bill would drop that rule, so people on Medicare could keep saving.
Today's law counts tampons, pads, and similar products as medical care for these accounts. The bill would strike that sentence, so the account could no longer pay for them tax-free.
Today the law says moving the account to a spouse or former spouse under a divorce order is not a taxable transfer. The bill would delete that rule.
Workers & Jobs
Today what your employer pays for your health plan is not taxed as your income. Five years after the bill became law, anyone hired by an employer on or after that date would owe income tax on it. Money the employer put into a health freedom account would stay tax-free.
More about this bill
You would no longer need a high-deductible health plan to open a tax-free medical account. Anyone could open one and deduct what they put in. The yearly limit would be $12,000, or $24,000 on a joint tax return. People 55 and older could add $5,000 on top. Today's limits are set in tax law and are far lower. The account could pay health insurance premiums, which is not allowed now. It could also pay for direct primary care and health care sharing ministries. People on Medicare could keep paying in, which the law bars today. Five years after the bill became law, the tax break on job-based health coverage would end for new hires. Workers hired on or after that date would owe income tax on what their employer pays for their health plan. Money their employer put into a health freedom account would stay tax-free instead. Workers already on the job would keep today's tax break.
Congressional Summary
Healthcare Freedom Act of 2025 This bill renames health savings accounts (HSAs) as health freedom accounts (HFAs), modifies the eligibility requirements and contribution limits for such accounts, and expands the definition of qualified medical expenses. The bill also eliminates the exclusion from income of employer contributions to a health plan for certain individuals. Under current law, individuals may establish and contribute to an HSA if covered under an HSA-eligible high-deductible health plan (HDHP). For 2025, HSA contributions are limited to $4,300 for self-only coverage or $8,550 for family coverage (adjusted annually). Individuals 55 or older may make an additional HSA contribution of up to $1,000 per year. Further, HSA distributions are tax-free if used to pay for qualified medical expenses. The bill allows individuals to establish and contribute to an HFA without being enrolled in an HDHP, contribute up to $12,000 ($24,000 for joint filers) per year to an HFA (adjusted annually), and contribute an additional $5,000 per year to an HFA if 55 or older. The bill also expands the definition of qualified medical expenses to include expenses related to direct primary care, health care sharing ministries, and medical cost sharing organizations. For individuals hired at least five years after the bill's enactment (1) employer contributions to an HFA may be excluded from the employee's income, and (2) the bill eliminates the exclusion from income of employer contributions to other health plans. (Under current law, employer contributions to a health plan generally are not included in the individual’s income.)
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Introduced in House
- Action Date
- 2025-01-09
- Date Added
- 2026-04-30
- Source
- Congress.gov →
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