# Plain Language Summary: Health Savings Act of 2021

This bill makes several changes to Health Savings Accounts (HSAs), which are special savings accounts that let people set aside money tax-free to pay for medical expenses. The main goal is to make these accounts more accessible and useful for more people.

The bill starts by renaming "high deductible health plans" to "HSA-qualified health plans" throughout the tax code—this is mostly a terminology update with no major practical change. More significantly, it expands who can use HSAs and how they can use them. For married couples, both spouses can now contribute catch-up amounts (extra contributions for people over 55) to the same HSA account, making it easier for older couples to save for healthcare costs together. The bill also allows people who are only enrolled in Medicare Part A hospital insurance to continue contributing to HSAs, and it lets Medicare Advantage MSA holders contribute their own money to their accounts—changes that benefit seniors who want to keep saving for medical expenses.

The bill broadens HSA eligibility in several other ways. People who receive healthcare through Indian Health Service programs, members of health care sharing ministries, and people with access to employer on-site clinics can now establish HSAs even though they have some form of health coverage. The bill also allows people to use HSAs with direct primary care arrangements (where you pay a flat fee to a doctor for basic care) without losing HSA eligibility. Additionally, the bill expands what medical expenses you can pay for with HSA money—it now includes certain exercise equipment, fitness programs, nutritional supplements, and dietary supplements.

Other changes make HSAs more flexible and protective. People can now use HSA funds to buy health insurance directly, and the bill gives HSAs the same bankruptcy protections that retirement accounts like IRAs receive, meaning creditors can't seize these funds if someone files for bankruptcy. The bill also allows people to fix administrative errors on their tax returns before the deadline.

Health Savings Act of 2021

LaTurner, Jake

Health Savings Act of 2021 This bill modifies the requirements for health savings accounts (HSAs) to <ul> <li>rename high deductible health plans as HSA-qualified health plans; </li> <li>allow spouses who have both attained age 55 to make catch-up contributions to the same HSA; </li> <li>make Medicare Part A (hospital insurance benefits) beneficiaries eligible to participate in an HSA;</li> <li>allow individuals eligible for hospital care or medical services under a program of the Indian Health Service or a tribal organization to participate in an HSA; </li> <li>allow members of a health care sharing ministry to participate in an HSA; </li> <li>allow individuals who receive primary care services in exchange for a fixed periodic fee or payment, or who receive health care benefits from an on-site medical clinic of an employer, to participate in an HSA; </li> <li>include amounts paid for prescription and over-the-counter medicines or drugs as qualified medical expenses for which distributions from an HSA or other tax-preferred savings accounts may be used; </li> <li> increase the limits on HSA contributions to match the sum of the annual deductible and out-of-pocket expenses permitted under a high deductible health plan; and </li> <li>allow HSA distributions to be used to purchase health insurance coverage.</li> </ul> The bill also (1) exempts HSAs from creditor claims in bankruptcy, and (2) reauthorizes Medicaid health opportunity accounts. The bill allows a medical care tax deduction for (1) exercise equipment, physical fitness programs, and membership at a fitness facility; (2) nutritional and dietary supplements; and (3) periodic fees paid to a primary care physician and amounts paid for pre-paid primary care services.