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S4353119th CongressWALLET

Health Savings Account Expansion Act

Sponsored By: Senator Marshall, Roger [R-KS]

Introduced

Summary

Expands eligibility for Health Savings Accounts (HSAs). This bill would widen who can use HSAs, revise high-deductible health plan rules, allow new prepaid medical expenses and certain premiums to be paid from HSAs, and change how health care sharing ministries are treated, and it would take effect for taxable years beginning after December 31, 2026.

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  • Families and individuals covered by government plans would be newly eligible to use HSAs. The bill specifically includes people with Medicare Parts A, B, or C, Medicaid, the Children’s Health Insurance Program and qualified CHIP look-alikes, and certain federal employee coverage.
  • HSA account rules and HDHP definitions would be changed. The bill streamlines the high-deductible health plan definition and would allow HSAs to pay for certain health plan or insurance coverage and prepaid physician fees or prepaid medical services.
  • Members of health care sharing ministries would see a split treatment. Ministries would not be treated as health plans or insurance under the tax title, but membership fees, shared medical payments, and ministry administrative fees would count as amounts paid for medical care for tax purposes.
  • Over-the-counter drug reimbursements would be tightened. HSAs and Archer medical savings accounts would reimburse only prescribed medicines or insulin, not general OTC drugs.

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 2 benefits, 1 costs, 1 mixed.

More people could use HSAs

This bill would let more people be treated as eligible for a health savings account (HSA). You would be eligible for an HSA for a month if, on the first day of that month, you are covered by Medicare Part A, B, or C; Medicaid; CHIP or a qualified CHIP look-alike; certain federal employee coverage under chapter 89 of title 5; or if you participate in a health care sharing ministry. This change would apply for taxable years beginning after December 31, 2026.

Use HSA money for prepaid care and some premiums

If enacted, this bill would let HSA funds pay for periodic physician fees or the right to receive services on an as-needed basis. It would also let HSA funds pay for prepaid medical services that screen, diagnose, treat, prevent disease, or promote wellness. In addition, you would be able to use HSA money to pay premiums for certain health plans described in the statute. These changes would apply for taxable years beginning after December 31, 2026.

Changes for sharing-ministry members

If enacted, the tax code would say health care sharing ministries are not treated as health insurance for tax rules starting for tax years after December 31, 2026. At the same time, if you belong to a health care sharing ministry and you pay membership, sharing, or administrative fees, you would be able to treat those amounts as medical expenses for the itemized medical expense deduction for tax years after December 31, 2026. Together the changes would reclassify ministries for tax purposes while allowing members to deduct ministry-related payments as medical care.

OTC drug reimbursements restricted

If enacted, the bill would limit HSA and Archer MSA reimbursements for medicines and drugs to prescribed drugs or insulin only. Over-the-counter medicines without a prescription would no longer be reimbursable from these accounts. This change would apply for taxable years beginning after December 31, 2026.

Sponsors & CoSponsors

Sponsor

Marshall, Roger [R-KS]

KS • R

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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