H.R. 548 — HSA Modernization Act

This section modifies health savings account (HSA) eligibility rules by disregarding coverage under VA chapter 17 medical care programs for any reason—not just for a service-connected disability—in determining whether an individual has disqualifying coverage, effective for taxable years beginning after December 31, 2025. (Thus, veterans eligible for such VA benefits without a service-connected disability may contribute to an HSA if covered by a high-deductible health plan and otherwise qualified.)

This section expands eligibility for Health Savings Account (HSA) contributions to include individuals entitled to Medicare Part A hospital insurance benefits solely by reason of age (i.e., section 226(a) of the Social Security Act, generally age 65 or older). (HSAs provide tax-favored savings for qualified medical expenses to individuals with high-deductible health plans who lack other disqualifying coverage.) The amendments apply to months beginning after December 31, 2025, in taxable years ending after such date.

This section establishes a special rule excluding hospital care or medical services received under Indian Health Service (IHS) or tribal organization programs from treatment as coverage under a disqualifying health plan for health savings account (HSA) eligibility. The rule applies to taxable years beginning after December 31, 2025. (As background, HSAs permit tax-favored contributions and withdrawals for qualified medical expenses but generally prohibit contributions by individuals covered under government-provided health coverage.)

This section expands the definition of high-deductible health plan (HDHP) for health savings account (HSA) eligibility to include bronze-level plans under ACA section 1302(d)(1)(A) and catastrophic health plans under ACA section 1302(e). (Thus, individuals enrolled in such plans may contribute to HSAs for months beginning after December 31, 2025.)

This section establishes a safe harbor under which a high-deductible health plan (HDHP) is not disqualified from HDHP status—and thus remains eligible for Health Savings Accounts (HSAs)—if it fails to impose a deductible for the first $500 of mental health benefits (as defined in IRC §9812(e)(4)). The provision applies to plan years beginning after December 31, 2025.

This section establishes a special rule treating a health savings account (HSA) as established on the date high deductible health plan (HDHP) coverage begins, if the HSA is established within the following 60 days—thus allowing reimbursement of qualified medical expenses incurred on or after the HDHP coverage date. The rule applies to HDHP coverage beginning after December 31, 2025.

This section revises the special contribution limit rule for married couples where at least one spouse has family coverage under a high-deductible health plan (HDHP), allowing both spouses age 55 or older to make catch-up contributions to the same health savings account (HSA) by including both spouses' additional catch-up amounts in the shared, divisible annual limit (for taxable years beginning after December 31, 2025). (As background, HSAs enable tax-free contributions, growth, and withdrawals for qualified medical expenses for HDHP enrollees; the family coverage limit is $8,300 for 2025, plus $1,000 catch-up per eligible individual age 55 or older.)

This section revises the base dollar amounts used to calculate maximum annual contributions to health savings accounts (HSAs) available to individuals enrolled in high-deductible health plans (HDHPs). (1) for self-only coverage, to the inflation-adjusted minimum HDHP annual deductible under IRC 223(c)(2)(A)(ii)(I) ($1,600 in 2024) from $2,250; (2) for family coverage, to the inflation-adjusted minimum HDHP annual deductible under IRC 223(c)(2)(A)(ii)(II) ($3,200 in 2024) from $4,500. It makes conforming amendments to the inflation adjustment rules in IRC 223(g)(1), including changing the base year for certain calculations to calendar year 2003 (from calendar year 2016), effective for taxable years beginning after December 31, 2025. (As background: Under current law, HSA contributions are limited to the lesser of the inflation-adjusted statutory dollar amount—$4,150 self-only and $8,300 family for 2024—or the HDHP's annual deductible.) (Thus, the changes replace the HSA-specific statutory dollar amounts with the minimum HDHP deductible amounts, potentially lowering maximum contributions for HDHPs with deductibles exceeding those minima.)

This section expands the definition of qualified medical expenses for health savings accounts (HSAs)—which allow tax-free distributions—to explicitly include qualified long-term care services (as defined in IRC §7702B(c)), for amounts paid after the date of enactment.