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[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 3248 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 3248
To amend the Internal Revenue Code of 1986 to increase the limitations
on contributions to health savings accounts, and for other purposes.
_______________________________________________________________________
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.
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 ``Health Savings Accounts For All Act
of 2025''.
SEC. 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.
SEC. 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.
SEC. 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.
SEC. 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.
SEC. 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.
SEC. 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.
SEC. 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.
SEC. 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.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
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