To amend the Internal Revenue Code of 1986 to reform certain rules related to health savings accounts.
Analysis under review: This bill has generated analysis that may be too generic or incomplete. Clause-level evidence remains available below.
Summary
What This Bill Does
This bill overhauls Health Savings Accounts (HSAs) to limit their use as tax shelters by high-income individuals. It phases out HSA deductions for households earning above ,000-,000, requires medical expense substantiation for tax-free withdrawals, limits reimbursements to 2 years, and excludes spa treatments and expensive exercise equipment. It also taxes excessive HSA fees charged by financial institutions and requires fee transparency.
Who Benefits and How
Lower and middle-income HSA holders benefit from fee protections as the bill caps HSA trustee fees and requires transparency on cash balance yields. Patients benefit from substantiation requirements that may reduce fraudulent or questionable medical expense claims. The IRS gains expanded information reporting to better enforce HSA rules.
Who Bears the Burden and How
High-income HSA holders (above ,000-,000 AGI) lose the ability to deduct contributions, reducing their tax savings. HSA account holders generally face new substantiation requirements for withdrawals and a 2-year reimbursement window. Financial institutions serving as HSA trustees face new excise taxes on excessive fees and mandatory fee reporting. Spa and beauty treatment providers lose HSA-eligible spending from customers.
Key Provisions
- Income-based phase-out of HSA deduction for AGI above ,000-,000 (over ,000 range)
- 2-year reimbursement window for qualified medical expenses
- Substantiation requirement with bona fide provider-patient relationship for medical expense claims
- Exclusion of spa treatments and exercise equipment above /year
- New excise tax on excessive HSA fees charged by trustees
- Mandatory reporting of fee categories and cash balance yields
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers.
At a Glance
What This Bill Does
Reforms Health Savings Accounts by adding income-based limits on deductible contributions, imposing substantiation requirements for distributions, restricting reimbursement timing, excluding certain expenses, taxing excessive HSA fees, and requiring fee transparency reporting.
Key Policy Areas
Health Care, Tax Policy, Consumer Protection, Financial Services Regulation
Primary Purpose
Reforms Health Savings Accounts by adding income-based limits on deductible contributions, imposing substantiation requirements for distributions, restricting reimbursement timing, excluding certain expenses, taxing excessive HSA fees, and requiring fee transparency reporting.
Policy Domains
HSA Reform Act
Identified Gains
Contextual inference, no direct clause citation- Lower and middle-income HSA holders
- IRS enforcement
- Consumer protection
Contextual inference, no direct clause citation
Identified Costs
Contextual inference, no direct clause citation- High-income HSA holders
- HSA trustees/financial institutions
- Spa and beauty treatment providers
Contextual inference, no direct clause citation
Sponsors
Legislative Progress
IntroducedMr. Doggett introduced the following bill; which was referred to …
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
HSA account holders, HSA account holders (fee reduction), HSA holders age 65 and over using accounts for non-medical expenses
HSA account holders faces effects in multiple directions
Positive-direction: HSA account holders (fee reduction)
Negative-direction: HSA holders age 65 and over using accounts for non-medical expenses, HSA holders who use accounts for spa/beauty/exercise expenses, High-income HSA holders (above income thresholds)
Financial institutions serving as HSA trustees, HSA trustees and financial institutions
Telehealth-only medical providers for HSA substantiation
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "the_secretary"
- → Secretary of the Treasury
Key Definitions
Terms defined in this bill
,000 for joint filers, ,000 for head of household, ,000 for married filing separately, ,000 for all others.
Adjusted gross income determined without regard to section 223 and sections 911, 931, and 933 of the IRC.
Maintenance fees, transfer fees, paper statement/check/card replacement fees, withdrawal fees, insufficient funds fees, fees to ensure fees do not exceed earnings, and other fees identified by the Secretary.
Any covered HSA fee that exceeds the reasonable amount as determined by the Secretary.
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