S. 3248

119 S3248 IS: Health Savings Accounts For All Act of 2025
 U.S. Senate
 2025-11-20
 text/xml
 EN
 Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
 II  119th CONGRESS  1st Session  S. 3248  IN THE SENATE OF THE UNITED STATES   November 20, 2025   Mr. Paul  introduced the following bill; which was read twice and referred to the  Committee on Finance    A BILL
To amend the Internal Revenue Code of 1986 to increase the limitations on contributions to health savings accounts, and for other purposes.
1.
Short title
This Act may be cited as the   Health Savings Accounts For All Act of 2025  .
2.
Increase in contribution limitations
(a)
In general
Subsection (b) of  section 223  of the Internal Revenue Code of 1986 is amended—
(1)
in paragraph (1), by striking  the sum of  and all that follows through the period and inserting  an amount equal to the applicable dollar amount under paragraph (1)(B) of section 402(g) (as adjusted pursuant to paragraph (4) of such section) with respect to such taxable year. ,
(2)
by striking paragraphs (2), (3), (5), (7), and (8),
(3)
by inserting after paragraph (1) the following:
(2)
Additional contributions for individuals 50 or older
In the case of an individual who has attained age 50 before the close of the taxable year, the amount of the limitation under paragraph (1) shall be increased by an amount equal to the applicable dollar amount under subparagraph (B)(i) of section 414(v)(2) (as adjusted pursuant to subparagraph (C) of such section).
 ,
(4)
in paragraph (4), by striking the flush matter following subparagraph (C), and
(5)
by redesignating paragraphs (4) and (6) as paragraphs (3) and (4), respectively.
(b)
Conforming amendments
(1)
Subparagraph (A) of  section 223(d)(1)  of the Internal Revenue Code of 1986 is amended by striking  the sum of—  and all that follows through the period and inserting  the amount determined under subsection (b)(1). .
(2)
Subsection (g)(1) of section 223 of such Code is amended—
(A)
by striking  (b)(2), (c)(2)(A), and  and inserting  (c)(2)(A) and, ,
(B)
by amending subparagraph (B) to read as follows:
(B)
the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which such taxable year begins determined by substituting  calendar year 2003  for  calendar year 2016  in subparagraph (A)(ii) thereof.
 , and
(C)
by striking  (b)(2), (c)(1)(E)(ii)(II),  and inserting  (c)(1)(E)(ii)(II) .
(3)
Section 26(b)(2)(S) of such Code is amended by striking  , 223(b)(8)(B)(i)(II), .
(4)
Section 408(d)(9)(C)(i)(I) of such Code is amended by striking  computed on the basis of the type of coverage under the high deductible health plan covering the individual .
(c)
Effective date
The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
3.
Freedom from mandate
(a)
In general
 Section 223  of the Internal Revenue Code of 1986, as amended by section 2, is further amended by striking subsections (c) and (g) and by redesignating subsections (d), (e), (f), and (h) as subsections (c), (d), (e), and (f), respectively.
(b)
Conforming amendments
(1)
Subsection (a) of  section 223  of the Internal Revenue Code of 1986 is amended to read as follows:
(a)
Deduction allowed
In the case of an individual, there shall be allowed as a deduction for the taxable year an amount equal to the aggregate amount paid in cash during such taxable year by or on behalf of such individual to a health savings account of such individual.
 .
(2)
Subsection (c)(1)(A) of section 223 of such Code, as amended by section 2 and redesignated by subsection (a), is further amended by striking  subsection (f)(4)  and inserting  subsection (e)(4) .
(3)
Subparagraph (U) of section 26(b)(2) of such Code, as amended by section 2, is further amended by striking  section 223(f)(3)  and inserting  section 223(e)(3) .
(4)
Sections 35(g)(3), 220(f)(5)(A), 848(e)(1)(B)(v), 4973(a)(5), and 6051(a)(12) of such Code are each amended by striking  section 223(d)  each place it appears and inserting  section 223(c) .
(5)
Section 106(d)(1) of such Code is amended—
(A)
by striking  who is an eligible individual (as defined in section 223(c)(1)) , and
(B)
by striking  section 223(d)  and inserting  section 223(c) .
(6)
Section 106(e) of such Code is amended—
(A)
by striking paragraphs (3) and (4) and by redesignating paragraph (5) as paragraph (4),
(B)
by inserting after paragraph (2) the following new paragraph:
(3)
Treatment as rollover contribution
A qualified HSA distribution shall be treated as a rollover contribution described in section 223(e)(4).
 , and
(C)
by striking  to any eligible individual covered under a high deductible health plan of the employer  in paragraph (4)(B)(ii) (as so redesignated) and inserting  to any employee with respect to whom a health savings account has been established .
(7)
Section 408(d)(9)(A) of such Code is amended by striking  who is an eligible individual (as defined in section 223(c)) and .
(8)
Section 877A(g)(6) of such Code is amended by striking  223(f)(4)  and inserting  223(e)(4) .
(9)
Section 4973(g) of such Code is amended—
(A)
by striking  section 223(d)  and inserting  section 223(c) ,
(B)
in paragraph (1), by striking  or 223(f)(5)  and inserting  or 223(e)(5) ,
(C)
in paragraph (2)(A), by striking  section 223(f)(2)  and inserting  section 223(e)(2) , and
(D)
in the flush matter at the end, by striking  section 223(f)(3)  and inserting  section 223(e)(3) .
(10)
Section 4975 of such Code is amended—
(A)
in subsection (c)(6)—
(i)
by striking  section 223(d)  and inserting  section 223(c) , and
(ii)
by striking  section 223(e)(2)  and inserting  section 223(d)(2) , and
(B)
in subsection (e)(1)(E), by striking  section 223(d)  and inserting  section 223(c) .
(11)
Subsection (b) of section 4980G of such Code is amended to read as follows:
(b)
Rules and requirements
(1)
In general
An employer meets the requirements of this subsection for any calendar year if the employer makes available comparable contributions to the health savings accounts of all comparable participating employees for each coverage period during such calendar year.
(2)
Comparable contributions
(A)
In general
For purposes of paragraph (1), the term  comparable contributions  means contributions—
(i)
which are the same amount, or
(ii)
if the employees are covered by a health plan, which are the same percentage of the annual deductible limit under the plan covering the employees.
(B)
Part-year employees
In the case of an employee who is employed by the employer for only a portion of the calendar year, a contribution to the health savings account of such employee shall be treated as comparable if it is an amount which bears the same ratio to the comparable amount (determined without regard to this subparagraph) as such portion bears to the entire calendar year.
(3)
Comparable participating employees
For purposes of paragraph (1), the term  comparable participating employees  means all employees who are covered (if at all) under the same health plan of the employer and have the same category of coverage. For purposes of the preceding sentence, the categories of coverage are self-only and family coverage.
(4)
Part-time employees
(A)
In general
Paragraph (3) shall be applied separately with respect to part-time employees and other employees.
(B)
Part-time employee
For purposes of subparagraph (A), the term  part-time employee  means any employee who is customarily employed for fewer than 30 hours per week.
 .
(12)
Section 4980G(d) of such Code is amended by striking  section 4980E  and inserting  this section .
(13)
Section 6693(a)(2)(C) of such Code is amended by striking  section 223(h)  and inserting  section 223(f) .
(c)
Effective date
The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
4.
Amounts paid for health insurance or direct primary care service arrangement
(a)
In general
Paragraph (2) of  section 223(c)  of the Internal Revenue Code of 1986, as redesignated by section 3, is amended—
(1)
in subparagraph (A), by inserting  or pursuant to an arrangement under which an individual is provided coverage restricted to primary care services in exchange for a fixed periodic fee or payment for primary care services  after  menstrual care products ,
(2)
by striking subparagraphs (B) and (C), and
(3)
by redesignating subparagraph (D) as subparagraph (B).
(b)
Conforming amendment
Paragraph (2) of  section 223(c)  of the Internal Revenue Code of 1986, as amended by the preceding sections of this Act, is further amended by striking  and any dependent (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) of such individual  and inserting  any dependent (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) of such individual, and any child (as defined in section 152(f)(1)) of such individual who has not attained the age of 27 before the end of such individual's taxable year .
(c)
Technical amendments
(1)
 Section 220(d)(2)(A)  of the Internal Revenue Code of 1986 is amended by striking  section 223(d)(2)(D)  and inserting  section 223(c)(2)(B) .
(2)
Subsection (f) of  section 106  of the Internal Revenue Code of 1986 is amended by striking  section 223(d)(2)(D)  and inserting  section 223(c)(2)(B) .
(d)
Effective dates
(1)
In general
The amendments made by subsections (a) and (b) shall apply with respect to amounts paid after the date of the enactment of this Act in taxable years beginning after such date.
(2)
Technical amendments
The amendments made by subsection (c) shall apply with respect to taxable years beginning after the date of enactment of this Act.
5.
Special rule for certain medical expenses incurred before establishment of account
(a)
In general
Paragraph (2) of  section 223(c)  of the Internal Revenue Code of 1986, as amended and redesignated by the preceding sections of this Act, is further amended by adding at the end the following new subparagraph:
(C)
Certain medical expenses incurred before establishment of account treated as qualified
An expense shall not fail to be treated as a qualified medical expense solely because such expense was incurred before the establishment of the health savings account if such expense was incurred—
(i)
during either—
(I)
the taxable year in which the health savings account was established, or
(II)
the preceding taxable year, in the case of a health savings account established after the taxable year in which such expense was incurred but before the time prescribed by law for filing the return for such taxable year (not including extensions thereof), and
(ii)
for medical care which (but for the fact that it was incurred before the establishment of the account) otherwise meets the requirements of the preceding subparagraphs.
 .
(b)
Effective date
The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
6.
Administrative error correction before due date of return
(a)
In general
Paragraph (4) of  section 223(e)  of the Internal Revenue Code of 1986, as amended and redesignated by the preceding sections of this Act, is amended by adding at the end the following new subparagraph:
(D)
Exception for administrative errors corrected before due date of return
Subparagraph (A) shall not apply if any payment or distribution is made to correct an administrative, clerical, or payroll contribution error and if—
(i)
such distribution is received by the individual on or before the last day prescribed by law (including extensions of time) for filing such individual's return for such taxable year, and
(ii)
such distribution is accompanied by the amount of net income attributable to such contribution.
 Any net income described in clause (ii) shall be included in the gross income of the individual for the taxable year in which it is received.
 .
(b)
Effective date
The amendment made by this section shall take effect on the date of the enactment of this Act.
7.
Allowing HSA rollover to child or parent of account holder
(a)
In general
Paragraph (8)(A) of  section 223(e)  of the Internal Revenue Code of 1986, as redesignated by the preceding sections of this Act, is amended—
(1)
by inserting  , child, parent, or grandparent  after  surviving spouse ,
(2)
by inserting  , child, parent, or grandparent, as the case may be,  after  the spouse ,
(3)
by inserting
, child, parent, or grandparent   after
spouse   in the heading thereof, and
(4)
by adding at the end the following:  In the case of a child who acquires such beneficiary’s interest and with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins, such health savings account shall be treated as a health savings account of such child. .
(b)
Effective date
The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
8.
Coverage for amounts paid for vitamins, dietary supplements, gym memberships, and wearable fitness trackers
(a)
In general
Paragraph (2) of  section 223(c)  of the Internal Revenue Code of 1986, as amended by the preceding provisions of this Act, is amended—
(1)
in subparagraph (A), by inserting  , qualified wellness expenses,  after  menstrual care products , and
(2)
by adding at the end the following:
(C)
Qualified wellness expenses
For purposes of this paragraph, the term  qualified wellness expenses  means amounts paid for—
(i)
vitamins,
(ii)
dietary supplements (as defined in section 201(ff) of the Federal Food, Drug, and Cosmetic Act ( 21 U.S.C. 321(ff) )),
(iii)
membership at a gym or fitness facility, or
(iv)
wearable fitness trackers.
 .
(b)
Effective date
The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
9.
Equivalent bankruptcy protections for health savings accounts as retirement funds
(a)
In general
Section 522 of title 11, United States Code, is amended by adding at the end the following new subsection:
(r)
Treatment of health savings accounts
For purposes of this section, any health savings account (as described in  section 223  of the Internal Revenue Code of 1986) shall be treated in the same manner as an individual retirement account described in section 408 of such Code.
 .
(b)
Effective date
The amendment made by this section shall apply to cases commencing under title 11, United States Code, after the date of the enactment of this Act.