[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 4353 Introduced in Senate (IS)]
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119th CONGRESS
2d Session
S. 4353
To amend the Internal Revenue Code of 1986 to expand eligibility for
health savings accounts.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 21, 2026
Mr. Marshall 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 expand eligibility for
health savings accounts.
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 Account Expansion
Act''.
SEC. 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.
SEC. 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.
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'' 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.
SEC. 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.
SEC. 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.
SEC. 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.
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