Health savings accounts (HSAs — tax-free accounts used to pay medical expenses) would become available to more Americans and allow higher contributions under this bill. Veterans using VA benefits without a service-connected disability, seniors enrolled in Medicare Part A, and people who receive care through the Indian Health Service could all open or contribute to HSAs, reversing current rules that disqualify them. ACA bronze and catastrophic health plans would count as qualifying 'high-deductible' plans, letting millions more marketplace enrollees use HSAs. Contribution limits would rise to match the out-of-pocket maximums on the enrolled plan, both spouses over 55 could make catch-up contributions to a single shared account, and HSA funds could explicitly cover long-term care services.
Average Household Impact
- HSA eligibility — expands to veterans on VA benefits (without service-connected disability), Medicare Part A enrollees, and Indian Health Service users
- HSA-qualifying plan types — includes ACA bronze and catastrophic plans, opening accounts to more marketplace enrollees
- HSA contribution limits — raises cap to the plan's out-of-pocket maximum, increasing the amount households can shelter tax-free
- Spousal catch-up contributions — allows both spouses over 55 to make catch-up contributions to a single shared account
- Covered expenses — explicitly adds long-term care services as a qualified HSA expense
Congressional Summary
HSA Modernization ActThis bill increases health savings account (HSA) contribution limits, expands HSA eligibility, and makes other changes to HSAs and high-deductible health plans (HDHP).The bill increases HSA contribution limits to equal the limits on out-of-pocket expenses under an HDHP (adjusted annually). Under the bill, the maximum annual HSA contribution for 2025 is $8,300 for self-only coverage and $16,600 for family coverage. (Under current law, the maximum annual HSA contribution for 2025 is $4,300 for self-only coverage and $8,550 for family coverage.)The bill expands eligibility to make tax-deductible HSA contributions to include individuals whoreceive hospital care or medical services from the Department of Veterans Affairs and do not have a service-connected disability,receive hospital care or medical services provided by the Indian Health Service or a tribal organization,are at least 65 years old and enrolled in Medicare Part A, orhave a bronze-level or catastrophic health insurance plan through a health insurance exchange.The bill also allows eligible married individuals to make catch-up contributions to the same HSA.Under the bill, HSA distributions may be used to pay for qualified medical expenses incurred before the HSA is established if the HSA is established within 60 days from the first day of coverage under an HDHP.Further, the bill specifies that HSA distributions may be used to pay for expenses for qualified long-term care services.Finally, the bill allows an HDHP to provide up to $500 of mental health benefits before the annual deductible is met.
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Introduced in House
- Action Date
- 2025-01-16
- Date Added
- 2026-06-02
- Source
- Congress.gov →
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