# Freedom for Families Act: Plain Language Summary

This bill makes two major changes to how Health Savings Accounts (HSAs) work. First, it allows people to withdraw money from their HSAs without penalty during family or medical leave. Currently, if you take time off work to care for a sick family member or deal with your own medical situation, you can't tap into your HSA savings without facing taxes and penalties on that withdrawal. This bill fixes that by letting you use your HSA funds during any qualifying leave covered by the Family and Medical Leave Act—which includes caring for a newborn, a seriously ill family member, or recovering from your own serious health condition.

The second major change removes the requirement that you must have a high-deductible health insurance plan to open and contribute to an HSA. Right now, HSAs are only available to people with these specific types of insurance plans. This bill opens HSAs up to anyone, regardless of what health insurance they have. It also significantly increases how much money you can put into an HSA each year—raising the limit to $9,000 for individuals and $18,000 for married couples filing jointly, roughly doubling the current amounts.

The practical effect is that more people would have access to tax-advantaged savings accounts for medical expenses, and those who take family or medical leave would have a financial cushion to draw from during that time without tax penalties. This could help families manage the financial strain of taking unpaid or partially paid leave, and it expands HSA access beyond the current limited group of people with high-deductible insurance plans.

Freedom for Families Act

Biggs, Andy

Freedom for Families Act This bill modifies requirements for health savings accounts (HSAs) to (1) exclude from gross income HSA distributions paid or distributed during a period of qualified caregiving, (2) allow participation in an HSA without enrollment in a high deductible health plan, and (3) increase the contribution limit for HSAs.