Kansas House Bill HB2430

Kansas 2025-2026 Regular Session

• Introduced: 1/12/26
• Refer: 1/12/26

Caption

Enacting the insurance savings account act, allowing individuals and corporations to establish insurance savings accounts with certain financial institutions, providing eligible expenses, requirements and restrictions for such accounts and establishing addition and subtraction modifications under the Kansas income tax act.

Summary

HB2430 creates the Kansas insurance savings account act, a new tax-advantaged savings vehicle for individuals and corporations to set aside money for certain insurance-related costs. Beginning January 1, 2027, account holders could open designated insurance savings accounts at eligible financial institutions and use the funds to pay insurance premiums or deductibles for covered property and casualty insurance. The bill sets annual contribution limits, allows multiple accounts, addresses payable-on-death treatment, and requires account holders to keep documentation of eligible expenses. The bill also amends the Kansas income tax act to provide matching tax treatment for these accounts. Contributions to an insurance savings account, and earnings on those contributions, would be subtracted from Kansas adjusted gross income or Kansas taxable income within specified limits, while withdrawals used for nonqualified purposes would be recaptured and added back to income. The secretary of revenue would be authorized to create reporting forms and adopt rules, and the commissioner of insurance would have nonexclusive authority to market the program. Financial institutions are expressly shielded from having to track qualified use or determine tax eligibility, limiting their administrative burden.

Impact

HB2430 would add a new set of income tax modifications to Kansas law and amend K.S.A. 79-32,117 and 79-32,138 to recognize insurance savings accounts for both individual and corporate taxpayers. It would create new statutory rules governing contributions, withdrawals, recapture, beneficiary treatment, documentation, and reporting, while also clarifying that banks and credit unions are not responsible for policing qualified uses. The bill would affect taxpayers seeking to save for insurance premiums and deductibles, financial institutions that may offer the accounts, and the Department of Revenue and Insurance Department, which would administer and promote the program.

Sentiment

No committee transcripts or recorded votes were provided, so there is no direct evidence of support or opposition in the available materials. Based on the bill text alone, the measure appears designed as a tax incentive and consumer-savings tool, suggesting a generally pro-savings and pro-insurance-access policy approach. The inclusion of administrative protections for financial institutions and explicit tax recapture rules indicates an effort to balance program flexibility with enforcement and compliance.

Contention

The main points of potential contention are likely to be the fiscal impact of allowing new Kansas income tax subtractions for contributions and earnings, the policy choice to extend tax benefits to both individuals and corporations, and the complexity of administering recapture rules for nonqualified withdrawals. Another possible issue is whether the program meaningfully helps consumers with insurance costs or primarily creates a new tax shelter. Financial institutions may also have concerns about optional participation, account designation, and compliance burdens, although the bill attempts to minimize those responsibilities by limiting their duties.