On February 5, Reps. Vern Buchanan (R-FL) and Mike Thompson (D-CA), both senior members of the tax-writing House Ways & Means Committee, introduced legislation that would allow use of health savings account (HSA) and flexible spending arrangement (FSA) funds to pay parents’ medical expenses. The Lowering Costs for Caregivers Act, H.R.7222, removes the requirement that parents be dependents for tax purposes before HSA/FSA money can be used to pay their medical expenses on a tax-free basis.

Companion legislation, S.3254, was introduced in the Senate last November, by Sens. Bill Cassidy (R-LA) and Jackie Rosen (D-NV).

Prospects: It is unlikely either the House or the Senate will take up this legislation any time soon—government funding and election-year politicking will take precedence over this relatively small-scale bill. However, depending on the cost estimate (which is not yet available) on the legislation, it is possible it will be among the tax proposals in play when Congress next turns its attention to a broad-scale tax bill. That is virtually certain to happen by 2025 and could come sooner.

 NAIFA Staff Contact: Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org.