SB4353, the Health Savings Account Expansion Act, would broaden who can use health savings accounts (HSAs) and how HSA funds may be used. The bill amends the Internal Revenue Code to allow HSA eligibility for individuals covered by government health programs, including Medicare, Medicaid, CHIP, certain federal employee coverage, and for participants in health care sharing ministries. It also revises the definition of high-deductible health plans and makes conforming changes to HSA rules.
The bill further expands the tax treatment of HSA and Archer MSA funds by allowing payment of certain health plan and health insurance premiums, and by treating fees and expenses associated with medical care service arrangements and health care sharing ministries as qualified medical expenses or medical care. It also changes the rules for over-the-counter drugs so that only prescribed drugs, regardless of whether they are available without a prescription, and insulin would qualify as reimbursable HSA/Archer MSA expenses. Most provisions would apply to taxable years beginning after December 31, 2026.
Impact
If enacted, the bill would significantly alter section 223 of the Internal Revenue Code governing HSAs and related provisions for Archer MSAs under section 220. It would expand eligibility beyond the current restrictions tied to other health coverage, add new categories of qualified medical expenses, and expressly exclude health care sharing ministries from being treated as health plans or insurance for federal tax purposes. The practical effect would be to increase access to tax-advantaged health accounts for people enrolled in public coverage or sharing ministries, while also broadening the range of reimbursable health-related costs.
Sentiment
The available record shows the bill was introduced and referred to the Senate Committee on Finance, but there are no committee transcripts or votes provided. Based on the bill text alone, the measure appears to reflect a pro-expansion, consumer-choice approach to health savings accounts, with an emphasis on flexibility in how individuals pay for health care. Because no recorded debate or vote history is included, there is no documented legislative sentiment beyond the bill’s stated policy direction.
Contention
The most likely points of contention are the bill’s inclusion of people covered by Medicare, Medicaid, CHIP, and other government plans in HSA eligibility, which departs from the traditional HSA framework that generally excludes individuals with other comprehensive coverage. Another likely issue is the bill’s favorable treatment of health care sharing ministries, including treating their fees and expense-sharing arrangements as medical care and excluding them from the definition of health insurance for tax purposes. Supporters would likely view these changes as expanding choice and affordability, while critics may argue they weaken existing HSA safeguards or blur the line between insurance and non-insurance arrangements.
Protecting Life in Health Savings Accounts ActThis bill excludes expenses paid for an abortion from qualified medical expenses eligible for reimbursement from certain tax-exempt savings accounts. (Some exceptions apply.)Under the bill, amounts paid for an abortion, other than an excluded abortion, are not qualified medical expenses eligible for reimbursement from a health savings account, Archer medical savings account, health flexible spending arrangement, health reimbursement arrangement, or retiree health account.The bill defines excluded abortion as any abortion (1) related to a pregnancy that is the result of rape or incest; or (2) performed because a woman is suffering from a physical disorder, injury, or illness (including a life-endangering physical condition caused by or arising from the pregnancy itself) that would, as certified by a physician, place the woman in danger of death if an abortion were not performed.
A bill for an act placing assessment limitations for property tax purposes on commercial child care facilities, and including effective date, applicability, and retroactive applicability provisions.(See HF 991.)
A bill for an act placing assessment limitations for property tax purposes on commercial child care facilities, and including effective date, applicability, and retroactive applicability provisions.(Formerly HSB 316.)
A bill for an act relating to penalties for the manufacture, delivery, or possession of certain amounts of controlled substances involving cocaine or cocaine base.