Tax changes: Restricting abortion expense reimbursement from Health Savings Accounts (HSA).
This bill amends the tax code regarding Health Savings Accounts (HSA), Archer MSAs, and flexible spending arrangements (FSA/HRA). It prohibits treating most abortion expenses as qualified medical expenses, meaning citizens cannot use these tax-advantaged funds for this purpose without tax consequences. Exceptions are made for cases of rape, incest, or when the woman's life is endangered, directly impacting how citizens plan their healthcare finances.
Key points
Expenses for abortion (other than in cases of rape, incest, or life endangerment) will no longer be considered qualified medical expenses under HSA and Archer MSA accounts.
This means distributions from HSA accounts for these costs will be taxable and potentially subject to penalties, changing the rules for using these savings.
Reimbursements for most abortion expenses from Health Flexible Spending Arrangements (FSA) and Health Reimbursement Arrangements (HRA) will also not be treated as medical expense reimbursements, affecting employee benefit plans.
The changes will apply to taxable years beginning after December 31, 2024.
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