The House-passed tax package includes a number of enhancements to the rules governing health savings accounts (HSAs). These provisions are not subject to an expiration date—they would take effect in 2026.
They include an increase in HSA contribution limits, on an income-limited basis. The new contribution limits would be $4,300 for a single taxpayer who earns $75,000 a year or less (with a phase-out of the new limit for incomes between $75,000 and $100,000). For married couples with incomes of $150,000 or less (with a phase-out for incomes between $150,000 and $200,000), the new contribution limit would be $8,550. The contribution limits are indexed for inflation.
Also included in the tax package are rules that allow individuals to contribute to an HSA even if they are covered by Medicare Part A, that qualify Exchange-based bronze and catastrophic health plans as required high deductible health plans (HDHPs) that must accompany an HSA, authority to roll over terminated health reimbursement arrangement (HRA) and flexible spending arrangement (FSA) funds into an HSA, and eligibility of both spouses to make catch-up contributions to the same HSA.
The HSA provisions also include authority to the Treasury Department to issue guidance to carry out these new rules.
Prospects: These HSA changes stand a good chance of being included in a final budget reconciliation bill, but this result is not guaranteed.
NAIFA Staff Contacts: Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org; or Mike Hedge – Senior Director – Government Relations, at mhedge@naifa.org.