H.R. 810 — Personalized Care Act of 2025

This section expands eligibility for health savings accounts (HSAs)—tax-advantaged accounts for qualified medical expenses—to any individual covered under a group or individual health plan, any health insurance coverage (including short-term limited duration plans or medical indemnity plans), specified government programs (i.e., Medicare Parts A or B, Medicaid, CHIP or qualified CHIP look-alike programs, TRICARE, VA health care programs as determined by the Secretary of Veterans Affairs, Indian Health Service or tribal programs, or Federal Employees Health Benefits), or participating in a health care sharing ministry, effective for taxable years beginning after December 31, 2024. (Previously, eligibility required coverage under a high-deductible health plan and excluded those with Medicare coverage.) It makes conforming amendments to replace all statutory references to high-deductible health plans with the new eligibility criteria and strikes the prior definitions of such plans.

This section increases the statutory annual contribution limits for health savings accounts (HSAs)—tax-advantaged accounts for medical expenses available to enrollees in high-deductible health plans—to $10,800 for self-only coverage (from $2,250) and $29,500 for family coverage (from $4,500). It further modifies the cost-of-living adjustment for these limits to apply only to taxable years beginning after 2024, using calendar year 2023 as the base year (from calendar year 1997). The changes apply to taxable years beginning after December 31, 2024.

This section permits tax-free distributions from health savings accounts (HSAs) for premiums of a high-deductible health plan (HDHP) described in IRC §223(c)(1)(A) (i.e., the HDHP required for HSA eligibility). (Previously, such premiums were not qualified medical expenses.) The amendments apply to taxable years beginning after December 31, 2024.

This section amends the Health Savings Account (HSA) rules by (1) expanding qualified medical expenses to include periodic fees paid to a physician for a defined set of medical services or the right to receive medical services on an as-needed basis, and amounts prepaid for medical services designed to screen for, diagnose, cure, mitigate, treat, or prevent disease and promote wellness; and (2) providing that such medical care service arrangements are not treated as a health plan, insurance, or other disqualifying coverage for HSA eligibility purposes. (Thus, HSA holders may use tax-free HSA funds for these arrangements without losing HSA eligibility.) The changes apply to taxable years beginning after December 31, 2024.

This section treats periodic fees paid for a defined set of medical services provided on an as-needed basis as amounts paid for medical care under section 213(d) of the Internal Revenue Code (i.e., qualifying such fees for the medical expense deduction). The change applies to taxable years beginning after December 31, 2024.

This section reduces the additional tax imposed on nonqualified distributions from Health Savings Accounts (HSAs)—i.e., amounts not used for qualified medical expenses—to 10% (from 20%) for taxable years beginning after December 31, 2024.

This section amends the health savings account (HSA) provisions of the Internal Revenue Code to (1) include amounts paid by members of a health care sharing ministry (HCSM)—defined in IRC §5000A(d)(2)(B)(ii) without regard to subclause (IV)—for sharing medical expenses among members and administrative fees as qualified medical expenses, and (2) provide that an HCSM is not treated as a health plan or insurance for tax purposes. (HSAs provide tax-favored savings and reimbursements for unreimbursed medical expenses of eligible individuals enrolled in a high-deductible health plan.) The changes apply to taxable years beginning after December 31, 2024.

This section treats amounts paid for membership in a health care sharing ministry (as defined in IRC §5000A(d)(2)(B)(ii), without regard to subclause (IV)) as amounts paid for medical care under IRC §213(d). (Thus, such amounts are eligible for the itemized deduction for medical expenses, subject to the 7.5% of adjusted gross income floor.) The provision applies to taxable years beginning after December 31, 2024.