This bill dramatically expands Health Savings Account eligibility and benefits. It removes the high-deductible health plan requirement, increases contribution limits to 10,800 dollars for individuals and 29,500 dollars for families, and expands qualified expenses to include insurance premiums and direct care fees.
Latest Action
Read twice and referred to the Committee on Finance.
AI Summary
Plain-English explanation of this bill
This bill dramatically expands Health Savings Account eligibility and benefits. It removes the high-deductible health plan requirement, increases contribution limits to 10,800 dollars for individuals and 29,500 dollars for families, and expands qualified expenses to include insurance premiums and direct care fees.
Last updated: 1/5/2026
Official Summary
Congressional Research Service summary
<p><strong>Personalized Care Act of </strong><strong>2025</strong></p><p>This bill expands health saving account (HSA) eligibility, increases HSA contribution limits, and makes other HSA-related changes. The bill also expands the definition of medical care for purposes of the itemized tax deduction for unreimbursed medical expenses.</p><p>The bill eliminates the requirement that an individual must be covered by a high-deductible health plan to establish and contribute to an HSA. Under the bill, an <em>eligible individual</em> is defined as (1) a health care sharing ministry participant, or (2) individual covered under</p><ul><li>a group or individual health plan;</li><li>health insurance (including a short-term limited duration and medical indemnity plan); or</li><li>a government plan (including Medicare Part A and B, Medicaid, the Children’s Health Insurance Program, certain military and government employee health benefit programs, and the Indian Health Service and tribal organization programs).</li></ul><p>The bill increases annual HSA contribution limits to $10,800 (from $4,300 in 2025) for self-only coverage and $29,500 (from $8,550 in 2025) for family coverage, adjusted annually for inflation.</p><p>The bill expands the qualified medical expenses that may be paid for with HSA distributions to include health insurance payments (e.g., premiums), direct care fees, and certain amounts paid by health care sharing ministry participants.</p><p>The bill decreases the penalty to 10% (from 20%) for nonqualified HSA distributions. </p><p>Finally, under the bill, direct care fees and fees paid for membership in a health care sharing ministry qualify as medical care for purposes of the itemized tax deduction for unreimbursed medical expenses.</p>
Key Points
Main provisions of the bill
Removes high-deductible plan requirement for HSAs
Increases contribution limits significantly
Expands qualified medical expenses to include premiums
Reduces penalty for nonqualified distributions to 10 percent
Extends HSA eligibility to Medicare and Medicaid enrollees
How This Impacts Americans
Potential effects on citizens and communities
More Americans could open and contribute to HSAs regardless of insurance type. Families could save more tax-free for healthcare costs. Direct primary care and health sharing ministry participants would benefit from expanded HSA access.
Policy Areas
Primary Policy Area
Taxation
Scope & Jurisdiction
Jurisdiction Level
federal
Congressional Session
119th Congress
Citation Reference
276, 119th Congress (2025). "Personalized Care Act of 2025". Source: Voter's Right Platform. https://votersright.org/bills/118-s-276
