HSA Reform: Income Limits, Penalty Changes, and Stricter Expense Rules
This bill significantly reforms HSA rules, primarily by limiting tax benefits for high-income earners and tightening requirements for qualified expenses. Citizens must adhere to a new two-year deadline for expense reimbursement, and the exception allowing penalty-free non-medical withdrawals after age 65 is repealed. The legislation also introduces measures to curb excessive administrative fees.
Key points
An income limit (e.g., $300,000 for joint filers) is imposed on deductible HSA contributions, restricting tax benefits for high earners.
The exception allowing penalty-free distributions for non-medical expenses after age 65 is repealed.
A two-year maximum deadline is established for reimbursing medical expenses from an HSA (starting from the date the expense was paid).
A tax is imposed on excessive fees charged by HSA administrators, and greater transparency in reporting account earnings is required.
Spa treatments, beauty treatments, and expensive exercise equipment (over $500 annually) are excluded from qualified HSA medical expenses.
Status:
Introduced
Civic Will
Why does your vote on bills matter?
It creates raw, undeniable proof. Civic Will provides the permanent data to verify the Government's loyalty towards its citizens
(explained here).
Start recording it now.