To amend the Internal Revenue Code of 1986 to allow qualified distributions from health savings accounts for certain home care expenses.
Sponsors
Legislative Progress
IntroducedMr. Smith of Nebraska (for himself and Mr. Panetta) introduced …
Summary
What This Bill Does
The Homecare for Seniors Act expands the types of expenses that can be paid tax-free from Health Savings Accounts (HSAs) to include professional home care services. Currently, HSA withdrawals are only tax-free for traditional medical expenses, but this bill would allow seniors and people with disabilities to use their HSA funds without tax penalties to pay for help with daily activities like eating, bathing, dressing, toileting, and medication management. The services must be provided by State-licensed caregivers and include at least three of the seven specified activities.
Who Benefits and How
Seniors and people with disabilities who need assistance at home benefit most directly by gaining access to tax-free HSA funds to pay for home care services, potentially saving thousands of dollars in taxes. HSA account holders with aging parents or relatives benefit by being able to use pre-tax dollars to pay for their loved ones' care. Home healthcare agencies and licensed caregivers benefit from expanded demand as more people can afford their services using tax-advantaged HSA accounts. The bill also requires federal agencies to publicize this new benefit, which will further increase awareness and usage.
Who Bears the Burden and How
The federal government loses tax revenue because HSA distributions for home care will no longer be taxed, with taxpayers indirectly bearing this cost through the federal deficit or reduced spending elsewhere. Unlicensed caregivers and family members who currently provide paid home care services are excluded from receiving HSA payments, creating a barrier for informal care arrangements where relatives might otherwise be compensated. The bill prohibits payments to related parties (family members), even if they are qualified caregivers, which may limit options for some families.
Key Provisions
- Amends Internal Revenue Code Section 223(d)(2) to redefine qualified medical expenses for HSA purposes to include "qualified home care"
- Defines qualified home care as contracts providing three or more of seven specified services: assistance with eating, toileting, transferring, bathing, dressing, continence, and medication adherence
- Requires home care providers to be State-licensed or operate in compliance with State requirements
- Explicitly prohibits using HSA funds to pay family members or related parties for home care services
- Mandates that the Department of Health and Human Services and Department of Treasury conduct a public awareness campaign about this new HSA benefit
- Takes effect for taxable years beginning after the date of enactment
Evidence Chain:
This summary is derived from the structured analysis below. See "Detailed Analysis" for per-title beneficiaries/burden bearers with clause-level evidence links.
Primary Purpose
Amends the Internal Revenue Code to allow tax-free distributions from Health Savings Accounts (HSAs) for qualified home care services
Policy Domains
Legislative Strategy
"Expand tax benefits for home care to make aging-in-place more affordable and reduce institutional care costs"
Likely Beneficiaries
- Seniors requiring home care assistance
- Families caring for aging relatives
- Home healthcare service providers
- HSA account holders with elderly dependents
Likely Burden Bearers
- Federal Treasury (reduced tax revenue from HSA distributions)
- Taxpayers (indirect cost of foregone revenue)
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "the_secretary_hhs"
- → Secretary of Health and Human Services
- "the_secretary_treasury"
- → Secretary of the Treasury
Key Definitions
Terms defined in this bill
Medical care (as defined in section 213(d)) and qualified home care
A contract to provide 3 or more of the following services in the residence of the service recipient: assistance with eating, toileting, transferring, bathing, dressing, continence, and medication adherence. Must be provided by State-licensed providers or consistent with State requirements.
Qualified home care excludes contracts between related parties within the meaning of section 267(b) or 707(b) of the Internal Revenue Code
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology