Referred to the House Committee on Ways and Means.
This bill allows direct distributions from an employee's health flexible spending arrangement (FSA) or health reimbursement arrangement (HRA) into that employee's health savings account (HSA) when the employee establishes coverage under a high-deductible health plan (HDHP) after a significant lapse in such coverage. It caps the aggregate transferable amount at the dollar limit in section 125(i)(1) (doubled for family coverage where applicable), adjusts the HSA contribution reduction rules, permits the FSA/HRA to become HSA-compatible for the remainder of the plan year, requires reporting of such distributions on Form W-2, and applies to distributions after December 31, 2025.
Progressives stress equity concerns and HDHP incentives.
Relative to its intended legislative type, this bill is a targeted statutory amendment to the Internal Revenue Code that is appropriately integrated into existing law and provides concrete legal mechanisms for allowing certain FSA/HRA-to-HSA transfers and related reporting.
This bill allows direct distributions from an employee's health flexible spending arrangement (FSA) or health reimbursement arrangement (HRA) into that employee's health savings account (HSA) when the employee establishes coverage under a high-deductible health plan (HDHP) after a significant lapse in such coverage.
It caps the aggregate transferable amount at the dollar limit in section 125(i)(1) (doubled for family coverage where applicable), adjusts the HSA contribution reduction rules, permits the FSA/HRA to become HSA-compatible for the remainder of the plan year, requires reporting of such distributions on Form W-2, and applies to distributions after December 31, 2025.
Content is technical and broadly uncontroversial, improving prospects; final outcome likely hinges on inclusion in a larger tax or budget vehicle and cost review.
Relative to its intended legislative type, this bill is a targeted statutory amendment to the Internal Revenue Code that is appropriately integrated into existing law and provides concrete legal mechanisms for allowing certain FSA/HRA-to-HSA transfers and related reporting.
Progressives stress equity concerns and HDHP incentives.
These are examples from the analysis, not a ranked list of the most-affected groups.
Progressives stress equity concerns and HDHP incentives.
Likely cautious or skeptical.
Supports reducing wasteful forfeitures and easing transitions, but worries the change could encourage high-deductible plans and shift costs to lower-income people.
Any broader effects on coverage access and equity are speculative.
Sees the bill as a pragmatic technical fix easing account transitions and reducing wasted pre-tax balances, but wants clarity on administrative details and fiscal effects.
Supportive if accompanied by clear IRS guidance and anti-abuse rules.
Generally favorable.
Values increased consumer flexibility, portability of pre-tax health dollars, and incentives for personal health savings.
Views reporting requirement as reasonable oversight; minimal objections unless new burdens emerge.
Reached or meaningfully advanced
Reached or meaningfully advanced
Still ahead
Still ahead
Still ahead
Content is technical and broadly uncontroversial, improving prospects; final outcome likely hinges on inclusion in a larger tax or budget vehicle and cost review.
The bill has not accumulated any surfaced votes yet.
Progressives stress equity concerns and HDHP incentives.
Content is technical and broadly uncontroversial, improving prospects; final outcome likely hinges on inclusion in a larger tax or budget v…
Relative to its intended legislative type, this bill is a targeted statutory amendment to the Internal Revenue Code that is appropriately integrated into existing law and provides concrete legal mechanisms for allowing…
Go beyond the headline summary with full stakeholder mapping, legislative design analysis, passage barriers, and lens-by-lens tradeoff breakdowns.