Expanded Health Savings Accounts: More Flexibility and Covered Expenses
This act significantly changes Health Savings Account (HSA) rules, making them more accessible and broadening the range of eligible expenses. Citizens will gain greater flexibility in managing their healthcare funds, regardless of whether they have a high-deductible health plan. The changes aim to increase freedom of choice in medical care.
Key points
Removes the requirement to be enrolled in a high-deductible health plan (HDHP) to open and use an HSA.
Expands qualified medical expenses to include menstrual care products, over-the-counter medicines, exercise equipment, direct primary care (DPC) services, and dental care items.
Allows coverage for medical expenses incurred before establishing an HSA in the same or preceding tax year.
Permits a surviving spouse or child to inherit an HSA without additional tax burdens.
Prohibits the use of HSA funds for insurance covering abortions or for abortion procedures themselves (with exceptions for saving the mother's life or removing a deceased fetus).
Simplifies correction of administrative errors in HSAs before the tax return due date.
Expired
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