Personalized Care Act of 2025
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.
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 eligible individual is defined as (1) a health care sharing ministry participant, or (2) individual covered under
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.
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.
The bill decreases the penalty to 10% (from 20%) for nonqualified HSA distributions.
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.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 810 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 810
To amend the Internal Revenue Code of 1986 to expand and improve health
savings accounts, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 28, 2025
Mr. Roy (for himself, Mr. Crane, Mr. Burlison, Ms. Hageman, Mr. Harris
of Maryland, Mr. Moore of Alabama, Mr. Tiffany, Mr. Ogles, and Mr.
Weber of Texas) introduced the following bill; which was referred to
the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to expand and improve health
savings accounts, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Personalized Care Act of 2025''.
SEC. 2. HEALTH SAVINGS ACCOUNT ELIGIBILITY.
(a) In General.--Paragraph (1) of section 223(c) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(1) Eligible individual.--The term `eligible individual'
means, with respect to any month, any individual if such
individual is--
``(A) covered under--
``(i) a group or individual health plan,
``(ii) health insurance coverage, including
a short term limited duration plan or medical
indemnity plan, or
``(iii) a government plan, including
coverage under the Medicare program under part
A or part B 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), medical coverage under chapter 55 of
title 10, United States Code (including
coverage under the TRICARE program), a health
care program under chapter 17 or 18 of title
38, United States Code, as determined by the
Secretary of Veterans Affairs in coordination
with the Secretary of Health and Human Services
and the Secretary, a medical care program of
the Indian Health Service or a tribal
organization, or coverage under chapter 89 of
title 5, United States Code, or
``(B) a participant in a health care sharing
ministry (as defined in section 5000A(d)(2)(B)(ii)
without regard to subclause (IV) thereof),
as of the 1st day of such month.''.
(b) Conforming Amendments.--
(1) Subsection (c) of section 223 of such Code is amended
by striking paragraphs (2) and (3) and by redesignating
paragraphs (4) and (5) as paragraphs (2) and (3), respectively.
(2) Paragraphs (2)(A) and (2)(B) of section 223(b) of such
Code are each amended by striking ``a high deductible health
plan'' and inserting ``a health plan, insurance, or ministry
described in subsection (c)(1)''.
(3) Paragraph (8)(A)(ii) of section 223(b) of such Code is
amended by striking ``high deductible health plan'' and
inserting ``health plan, insurance, or ministry described in
subsection (c)(1)''.
(4) Section 223(g)(1) of such Code is amended--
(A) by striking ``subsections (b)(2) and
(c)(2)(A)'' both places it appears and inserting
``subsection (b)(2)'', and
(B) in subparagraph (B), by striking ``for
`calendar year 2016''' and all that follows through
```calendar year 2003'.'' and inserting ```calendar
year 1997' for `calendar year 2016' in subparagraph
(A)(ii) thereof.''.
(5) The heading of subparagraph (B) of section 223(b)(8) of
such Code is amended by striking ``high deductible health
plan''.
(6) Section 26(b)(2)(S) of such Code is amended by striking
``high deductible health plan''.
(7) The heading of paragraph (3) of section 106(e) of such
Code is amended by striking ``high deductible health plan''.
(8) Clause (ii) of section 106(e)(5)(B) of such Code is
amended by striking ``a high deductible health plan'' and
inserting ``a health plan''.
(9) Paragraph (9) of section 408(d) of such Code is
amended--
(A) by striking ``the high deductible health plan
covering'' in subparagraph (C)(i)(I) and inserting
``health plan, insurance, or ministry of'',
(B) by striking ``a high deductible health plan''
the first place it appears in subparagraph (C)(ii)(II)
and inserting ``a health plan, insurance, or ministry
described in section 223(c)(1)'',
(C) by striking ``a high deductible health plan''
the second place it appears in subparagraph (C)(ii)(II)
and inserting ``any such plan, insurance, or
ministry'', and
(D) by striking ``high deductible health plan'' in
the heading of subparagraph (D).
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2024.
SEC. 3. INCREASE IN HSA CONTRIBUTION LIMITS.
(a) In General.--Paragraph (2) of section 223(b) of the Internal
Revenue Code of 1986 is amended--
(1) by striking ``$2,250'' in subparagraph (A) and
inserting ``$10,800'', and
(2) by striking ``$4,500'' in subparagraph (B) and
inserting ``$29,500''.
(b) Cost-of-Living Adjustment.--Paragraph (1) of section 223(g) of
the Internal Revenue Code of 1986, as amended by section 2, is
amended--
(1) by striking ``Each'' and inserting ``In the case of a
taxable year beginning after 2024, each'', and
(2) by striking ``calendar year 1997'' and inserting
``calendar year 2023''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2024.
SEC. 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 for coverage under'' 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 (iii),
(B) by striking the period at the end of clause
(iv) and inserting ``, or'', and
(C) by adding at the end the following new clause:
``(v) a health plan or health insurance
coverage described in subsection (c)(1)(A).''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2024.
SEC. 5. TREATMENT OF MEDICAL CARE SERVICE ARRANGEMENTS.
(a) Inclusion as Medical Expenses.--Paragraph (2) of section 223(d)
of the Internal Revenue Code of 1986, as amended by section 4, 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.''.
(b) Arrangement Not To Be Treated as Health Insurance.--Subsection
(c) of section 223 of the Internal Revenue Code of 1986, as amended by
section 2(b), is further amended by adding at the end the following new
paragraph:
``(4) Treatment of medical care service arrangements.--An
arrangement under which an individual is provided medical
services in exchange for a fixed periodic fee or payment for
such services shall not be treated as a health plan, insurance,
or arrangement described in paragraph (1).''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2024.
SEC. 6. PERIODIC PROVIDER FEES 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) Periodic provider fees.--Periodic fees paid for a
defined set of medical services provided on an as-needed basis
shall be treated as amounts paid for medical care.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2024.
SEC. 7. RESTORING LOWER PENALTY FOR NONQUALIFIED DISTRIBUTIONS.
(a) In General.--Section 223(f)(4)(A) of the Internal Revenue Code
of 1986 is amended by striking ``20 percent'' and inserting ``10
percent''.
(b) Effective Date.--The amendments made by this section shall
apply to distributions made in taxable years beginning after December
31, 2024.
SEC. 8. TREATMENT OF HEALTH CARE SHARING MINISTRIES.
(a) Inclusion as Medical Expenses.--Paragraph (2) of section 223(d)
of the Internal Revenue Code of 1986, as amended by sections 4 and 5,
is further amended by adding at the end the following new subparagraph:
``(E) Inclusion of health care sharing
ministries.--The term `qualified medical expenses'
shall include amounts paid by a member of a health care
sharing ministry (as defined in section
5000A(d)(2)(B)(ii) without regard to subclause (IV)
thereof) for--
``(i) the sharing of medical expenses among
members, and
``(ii) administrative fees of the
ministry.''.
(b) Health Care Sharing Ministry Not To Be Treated as Health
Insurance.--Subsection (c) of section 223 of the Internal Revenue Code
of 1986, as amended by sections 2 and 5, is further amended by adding
at the end the following new paragraph:
``(5) 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.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2024.
SEC. 9. HEALTH CARE SHARING MINISTRY FEES TREATED AS MEDICAL CARE.
(a) In General.--Section 213(d) of the Internal Revenue Code of
1986, as amended by section 6, is further amended by adding at the end
the following new paragraph:
``(13) Health care sharing ministries.--Amounts paid for
membership in 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.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2024.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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