Health Savings Accounts For All Act of 2025
Sponsored By: Senator Rand Paul
Introduced
Summary
Expanded, more flexible Health Savings Accounts that raise contribution limits and broaden what counts as eligible health and wellness spending. The bill also loosens the link to high-deductible health plans and adds stronger rollover and legal protections.
Show full summary
- Savers and families get higher HSA contribution limits that are indexed to Code amounts and a new catch-up for people age 50 and over. HSAs may be rolled to a child, parent, or grandparent under specified conditions so balances can stay in tax-advantaged accounts.
- Individuals can use HSA funds for direct primary care and new wellness items now listed as eligible, including vitamins, dietary supplements, gym memberships, and wearable fitness trackers. The law also treats certain medical expenses incurred before an HSA was established as qualified when timing and use rules are met.
- Account owners receive stronger protections and administrative fixes. HSAs get bankruptcy treatment aligned with individual retirement accounts and there are rules to correct pre-tax contribution errors and harmonize related tax-code cross references to reflect the broader HSA uses.
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Bill Overview
Analyzed Economic Effects
7 provisions identified: 5 benefits, 0 costs, 2 mixed.
Bigger HSA deductions and limits
If enacted, you could deduct HSA contributions even if you are not in a high-deductible health plan. The yearly contribution limit would be set by other tax-code dollar amounts and would include a new catch-up amount for people 50 and older. The cost-of-living baseline used for future adjustments would also change. These changes would apply for taxable years beginning after enactment.
Protect HSAs in bankruptcy cases
If enacted, HSAs would be treated like individual retirement accounts for bankruptcy exemption purposes. That would protect HSA balances from creditors in bankruptcy cases that start after enactment.
Employer rules for HSA contributions
If enacted, employers would need to offer comparable HSA contributions to comparable employees each year. Comparable means the same dollar amount or the same percentage of the plan deductible. Part-year and part-time workers would get proportional treatment. The rule would apply separately to part-time employees and others for taxable years after enactment.
HSA rollovers to family members
If enacted, an HSA could be rolled over to a child, parent, or grandparent, not just a surviving spouse. If a child gets the account and someone else can claim that child as a dependent for that year, the account would be treated as the child's HSA. The bill would also expand which children count as covered dependents for HSA rules. These changes apply for taxable years beginning after enactment.
Reimburse pre-HSA medical expenses
If enacted, certain medical bills you paid before you opened an HSA could be paid from the HSA later. The bill lets expenses count if they were incurred the same taxable year you set up the HSA, or in the prior taxable year in a limited filing-deadline situation. It also removes a coverage-based computation rule and aligns rollover treatment for some HSA distributions. These changes apply for taxable years starting after enactment.
Use HSA for wellness and care
If enacted, you could use HSA money for vitamins, dietary supplements (as defined in federal law), gym or fitness memberships, and wearable fitness trackers. You could also use HSA funds to pay fixed-fee primary care arrangements that cover only primary care services. These rules would apply to amounts paid after enactment for taxable years starting after that date.
Fix HSA contribution mistakes
If enacted, an administrative HSA contribution error could be corrected without the default penalty if the mistaken amount is returned to you by your tax return due date (including extensions). Any net income tied to the mistaken contribution must be returned and reported as taxable income. This rule would take effect on the date of enactment.
Sponsors & CoSponsors
Sponsor
Rand Paul
KY • R
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
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