Sponsor
Michelle Fischbach
Representative · R-MN
Representative · R-MN
The bill removes ambiguity and prevents some double-penalty situations by clarifying that Medicare Part A entitlement ends HSA contribution eligibility, but it also permanently cuts off HSA contribution access for those who attain Medicare Part A (often at 65), reducing tax-advantaged retirement medical savings and adding tracking burdens for near-retirees.
People entitled to Medicare Part A (generally at age 65) and taxpayers get clearer rules: the bill explicitly states that Medicare Part A entitlement ends HSA contribution eligibility, reducing ambiguity for beneficiaries, taxpayers, and the IRS.
Taxpayers who face nonqualified HSA distributions may avoid being hit by overlapping penalty rules because the bill exempts certain 'eligible individuals' from a penalty-coordination rule, reducing risk of double penalties.
People who become entitled to Medicare Part A (typically at or after age 65) will lose the ability to make HSA contributions, reducing a common tax-advantaged way to save for future medical costs in retirement.
Seniors and near-retirees who can no longer contribute to HSAs may face higher out-of-pocket healthcare costs in retirement because they lose the opportunity to accumulate tax-deductible HSA savings.
Near-retirees and other taxpayers will need to track the timing of Medicare Part A entitlement relative to HSA contributions, creating added tax compliance complexity and potential administrative costs.
Based on analysis of 2 sections of legislative text.
Makes entitlement to Medicare Part A because of age a disqualification for making HSA contributions and updates related HSA rules.
Official title: To amend the Internal Revenue Code of 1986 to allow individuals entitled to Medicare Part A to make contributions to health savings accounts.
Introduced August 10, 2026 by Michelle Fischbach · Last progress August 10, 2026
Amends federal tax law for health savings accounts (HSAs) so that people who are entitled to Medicare Part A because of age are not treated as “eligible individuals” and therefore cannot make HSA contributions. The change also updates related cross-references and penalty coordination rules. The rule takes effect for months beginning after December 31, 2026 (in taxable years ending after that date).