House Bill Would Expand Caregivers' Access to HSA and FSA Cash

By Allison Bell

News January 06, 2025 at 12:06 PM

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A Republican and a Democrat in the U.S. House are continuing an effort to make health savings accounts and flexible spending accounts a little kinder toward caregivers.

Rep. Vern Buchanan, R-Fla., and Rep. Mike Thompson, D-Calif., have reintroduced the Lower Costs for Caregivers Act bill.

The bill would let people with HSAs or FSAs use the cash to pay for medical care for parents or other loved ones who were not their dependents.

Under current law, account holders can use tax-free distributions to pay for care only for loved ones who are classified as dependents.

What it means: Long-term care finance continues to be a topic that helps bring Republicans and Democrats in Congress together.

The details: The Lower Costs for Caregivers Act bill, H.R. 138, was one of 225 introduced Friday, as the 119th Congress came to life.

The bill is under the jurisdiction of the House Ways and Means Committee.

Buchanan is the chair of the House Ways and Means health subcommittee, and Thompson is a member of the subcommittee.

The new bill does not yet have other co-sponsors listed, but the version introduced in the 118th Congress ended up with 17 Democratic co-sponsors and 13 Republican co-sponsors.

The list of organizations supporting the bill includes AARP and Fidelity Investments.

Other bills: Buchanan also introduced a bill that would make parts of the Tax Cuts and Jobs Act of 2017 permanent.

Rep. Andy Biggs, R-Ariz., introduced a bill that would let HSA holders use tax-free distributions to pay for any expenses incurred while they were using Family and Medical Leave Act leave to provide care for loved ones.

Credit: Kacso Sandor/iStock

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