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S. 4353

Health Savings Account Expansion Act

Shown here: Introduced in Senate (2026-04-21)

To amend the Internal Revenue Code of 1986 to expand eligibility for health savings accounts.

1. Short title

This Act may be cited as the “Health Savings Account Expansion Act”.

2. Health savings account eligibility

(a) In general

Subparagraph (A) of section 223(c)(1) of the Internal Revenue Code of 1986 is amended—

(1) by striking “if—” and inserting “if, as of the 1st day of such month—”

(2) by striking “as of the 1st day of such month” in clause (i),

(3) by redesignating subclauses (I) and (II) of clause (ii) as items (aa) and (bb), respectively, and by moving such items 2 ems to the right,

(4) by redesignating clause (ii) as subclause (II) and by moving such subclause 2 ems to the right,

(5) by striking “such individual” in subclause (II), as so redesignated,

(6) by striking “such individual is covered” in clause (i) and inserting “such individual—

(I) is covered

(7) by striking the period at the end and inserting “, or”, and

(8) by adding at the end the following new clause:

(ii) such individual—
(I) is covered under a government plan, including coverage under the Medicare program under part A, part B, or part C of title XVIII of the Social Security Act, the Medicaid program under title XIX of such Act, the CHIP program under title XXI of such Act or a qualified CHIP look-alike program (as defined in section 2107(g) of such Act), or coverage under chapter 89 of title 5, United States Code, or
(II) is a participant in a health care sharing ministry (as defined in section 5000A(d)(2)(B)(ii) without regard to subclause (IV) thereof).

(b) Conforming amendments

(1) Section 223(c)(1)(B) of the Internal Revenue Code of 1986 is amended by striking “(A)(ii)” and inserting “(A)(i)(II)”.

(2) Section 223(c)(1)(E)(i) of such Code is amended by striking “(A)(ii)” and inserting “(A)(i)(II)”.

(c) Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2026.

3. High deductible health plan requirements

(a) In general

Paragraph (2) of section 223(c) of the Internal Revenue Code of 1986 is amended—

(1) by striking clause (ii),

(2) by striking “a health plan—” and all that follows through “which has an annual deductible” and inserting “a health plan which has an annual deductible”, and

(3) by redesignating subclauses (I) and (II) as clauses (i) and (ii), respectively, and by moving such clauses 2 ems to the left.

(b) Conforming amendments

(1) Paragraph (2) of section 223(c) of the Internal Revenue Code of 1986 is amended by striking subparagraphs (B) and (D) and by redesignating subparagraphs (C), (E), (F), (G), and (H) as subparagraphs (B), (C), (D), (E), and (F), respectively.

(2) Subparagraph (D) of section 223(c)(2) of such Code, as so redesignated, is amended by striking “paragraph (2)(A)(i)” and inserting “subparagraph (A)”.

(c) Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2026.

4. Payment of health plan and health insurance premiums from HSA

(a) In general

Paragraph (2) of section 223(d) of the Internal Revenue Code of 1986 is amended—

(1) by striking subparagraph (B),

(2) by redesignating subparagraphs (C) and (D) as subparagraphs (B) and (C), respectively,

(3) by striking “Subparagraph (B) shall not apply to any expense” in subparagraph (B), as so redesignated, and inserting “Subparagraph (A) shall not apply to any payment for insurance other than”, and

(4) in subparagraph (B), as so redesignated—

(A) by striking “or” at the end of clause (iv),

(B) by striking the period at the end of clause (v) and inserting “, or”, and

(C) by adding at the end the following new clause:

(vi) a health plan or health insurance coverage described in subsection (c)(1)(A).

(b) Inclusion of medical care service arrangements as medical expenses

Paragraph (2) of section 223(d) of the Internal Revenue Code of 1986, as amended by subsection (a), is further amended by adding at the end the following new subparagraph:

(D) Inclusion of medical care service arrangements
The term qualified medical expenses shall include—
(i) periodic fees paid to a physician for a defined set of medical services or for the right to receive medical services on an as-needed basis, and
(ii) amounts prepaid for medical services designed to screen for, diagnose, cure, mitigate, treat, or prevent disease and promote wellness.

(c) Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2026.

5. Treatment of health care sharing ministries

(a) In general

Subsection (c) of section 223 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(6) Treatment of health care sharing ministries
A health care sharing ministry (as defined in section 5000A(d)(2)(B)(ii) without regard to subclause (IV) thereof) shall not be treated as a health plan or insurance for purposes of this title.

(b) Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2026.

6. Health care sharing ministry expenses treated as medical care

(a) In general

Section 213(d) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(12) Health care sharing ministries
Amounts paid for the following expenses with respect to a health care sharing ministry (as defined in section 5000A(d)(2)(B)(ii) without regard to subclause (IV) thereof) shall be treated as amounts paid for medical care:
(A) Membership fees for such health care sharing ministry.
(B) The sharing of medical expenses among members.
(C) Administrative fees of the ministry.

(b) Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2026.

7. Eligibility for over the counter drugs

(a) HSAs

(1) In general

Subparagraph (A) of section 223(d)(2) of the Internal Revenue Code of 1986 is amended by adding at the end the following: “Such term shall include an amount paid for medicine or a drug only if such medicine or drug is a prescribed drug (determined without regard to whether such drug is available without a prescription) or is insulin.”.

(2) Conforming amendment

Paragraph (2) of section 223(d) of such Code is amended by striking subparagraph (C) and by redesignating subparagraphs (D) and (E) as subparagraphs (C) and (D), respectively.

(b) Archer MSAs

Section 220(d)(2)(A) of the Internal Revenue Code of 1986 is amended by adding at the end the following: “Such term shall include an amount paid for medicine or a drug only if such medicine or drug is a prescribed drug (determined without regard to whether such drug is available without a prescription) or is insulin.”.

(c) Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2026.

Workspace/Typeset/Bill

S. 4353

Health Savings Account Expansion Act

Shown here: Introduced in Senate (2026-04-21)

To amend the Internal Revenue Code of 1986 to expand eligibility for health savings accounts.

1. Short title

This Act may be cited as the “Health Savings Account Expansion Act”.

2. Health savings account eligibility

(a) In general

Subparagraph (A) of section 223(c)(1) of the Internal Revenue Code of 1986 is amended—

(1) by striking “if—” and inserting “if, as of the 1st day of such month—”

(2) by striking “as of the 1st day of such month” in clause (i),

(3) by redesignating subclauses (I) and (II) of clause (ii) as items (aa) and (bb), respectively, and by moving such items 2 ems to the right,

(4) by redesignating clause (ii) as subclause (II) and by moving such subclause 2 ems to the right,

(5) by striking “such individual” in subclause (II), as so redesignated,

(6) by striking “such individual is covered” in clause (i) and inserting “such individual—

(I) is covered

(7) by striking the period at the end and inserting “, or”, and

(8) by adding at the end the following new clause:

(ii) such individual—
(I) is covered under a government plan, including coverage under the Medicare program under part A, part B, or part C of title XVIII of the Social Security Act, the Medicaid program under title XIX of such Act, the CHIP program under title XXI of such Act or a qualified CHIP look-alike program (as defined in section 2107(g) of such Act), or coverage under chapter 89 of title 5, United States Code, or
(II) is a participant in a health care sharing ministry (as defined in section 5000A(d)(2)(B)(ii) without regard to subclause (IV) thereof).

(b) Conforming amendments

(1) Section 223(c)(1)(B) of the Internal Revenue Code of 1986 is amended by striking “(A)(ii)” and inserting “(A)(i)(II)”.

(2) Section 223(c)(1)(E)(i) of such Code is amended by striking “(A)(ii)” and inserting “(A)(i)(II)”.

(c) Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2026.

3. High deductible health plan requirements

(a) In general

Paragraph (2) of section 223(c) of the Internal Revenue Code of 1986 is amended—

(1) by striking clause (ii),

(2) by striking “a health plan—” and all that follows through “which has an annual deductible” and inserting “a health plan which has an annual deductible”, and

(3) by redesignating subclauses (I) and (II) as clauses (i) and (ii), respectively, and by moving such clauses 2 ems to the left.

(b) Conforming amendments

(2) Subparagraph (D) of section 223(c)(2) of such Code, as so redesignated, is amended by striking “paragraph (2)(A)(i)” and inserting “subparagraph (A)”.

(c) Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2026.

4. Payment of health plan and health insurance premiums from HSA

(a) In general

Paragraph (2) of section 223(d) of the Internal Revenue Code of 1986 is amended—

(1) by striking subparagraph (B),

(2) by redesignating subparagraphs (C) and (D) as subparagraphs (B) and (C), respectively,

(4) in subparagraph (B), as so redesignated—

(A) by striking “or” at the end of clause (iv),

(B) by striking the period at the end of clause (v) and inserting “, or”, and

(C) by adding at the end the following new clause:

(vi) a health plan or health insurance coverage described in subsection (c)(1)(A).

(b) Inclusion of medical care service arrangements as medical expenses

Paragraph (2) of section 223(d) of the Internal Revenue Code of 1986, as amended by subsection (a), is further amended by adding at the end the following new subparagraph:

(D) Inclusion of medical care service arrangements
The term qualified medical expenses shall include—
(i) periodic fees paid to a physician for a defined set of medical services or for the right to receive medical services on an as-needed basis, and
(ii) amounts prepaid for medical services designed to screen for, diagnose, cure, mitigate, treat, or prevent disease and promote wellness.

(c) Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2026.

5. Treatment of health care sharing ministries

(a) In general

Subsection (c) of section 223 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(6) Treatment of health care sharing ministries
A health care sharing ministry (as defined in section 5000A(d)(2)(B)(ii) without regard to subclause (IV) thereof) shall not be treated as a health plan or insurance for purposes of this title.

(b) Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2026.

6. Health care sharing ministry expenses treated as medical care

(a) In general

Section 213(d) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(12) Health care sharing ministries
Amounts paid for the following expenses with respect to a health care sharing ministry (as defined in section 5000A(d)(2)(B)(ii) without regard to subclause (IV) thereof) shall be treated as amounts paid for medical care:
(A) Membership fees for such health care sharing ministry.
(B) The sharing of medical expenses among members.
(C) Administrative fees of the ministry.

(b) Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2026.

7. Eligibility for over the counter drugs

(a) HSAs

(1) In general

(2) Conforming amendment

Paragraph (2) of section 223(d) of such Code is amended by striking subparagraph (C) and by redesignating subparagraphs (D) and (E) as subparagraphs (C) and (D), respectively.

(b) Archer MSAs

(c) Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2026.