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Advancing Health Savings Act of 2023
1/15/2025, 3:28 PM
Summary of Bill HR 5690
One of the key provisions of the bill is to increase the annual contribution limits for HSAs. Currently, individuals can contribute up to $3,600 and families up to $7,200 per year. The Advancing Health Savings Act of 2023 seeks to raise these limits to $5,000 for individuals and $10,000 for families. This would allow individuals and families to save more money tax-free for medical expenses.
Additionally, the bill aims to make it easier for individuals to use their HSA funds for a wider range of healthcare expenses. Under the proposed legislation, over-the-counter medications, menstrual care products, and certain fitness and wellness expenses would be eligible for HSA reimbursement. This would give individuals more flexibility in how they use their HSA funds to cover their healthcare needs. Furthermore, the Advancing Health Savings Act of 2023 includes provisions to allow individuals to use their HSA funds to pay for direct primary care arrangements and certain telehealth services. This would help individuals access healthcare services more easily and affordably, especially in rural or underserved areas. Overall, the Advancing Health Savings Act of 2023 aims to promote greater access to healthcare and empower individuals to take control of their own healthcare expenses. By expanding the use and flexibility of HSAs, this bill seeks to provide individuals and families with more options for saving and paying for their healthcare needs.
Congressional Summary of HR 5690
Advancing Health Savings Act of 2023
This bill excludes from taxable income any distributions from a health savings account (HSA) used to pay qualified medical expenses incurred before the HSA is established if the HSA is established within 60 days from the first day of coverage under a high-deductible health plan (HDHP).
Under current law, distributions from an HSA established in connection with a HDHP are excluded from taxable income if used to pay qualified medical expenses incurred on or after the date that the HSA is established. However, under current law, HSA distributions are taxable if used to pay otherwise qualified medical expenses incurred after enrolling in an HDHP but before establishing an HSA.
Under the bill, an HSA that is established within 60 days of the first day of coverage under an HDHP is treated as being established on the first date that coverage begins under the HDHP.
