Lowering Costs for Caregivers Act of 2025

This bill aims to lower costs for family caregivers by letting people use common health accounts to pay for a parent’s medical care. It updates rules for Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs), Health Reimbursement Arrangements (HRAs), and Archer MSAs so that money in these accounts can be used for a parent’s medical needs without extra taxes. The text for FSAs and HRAs also makes clear this can include a spouse’s parent.

Key points:

• Who is affected: People with HSAs, FSAs, HRAs, or Archer MSAs who help pay for a parent’s medical care; FSAs/HRAs explicitly include a spouse’s parent.
• What changes: These accounts can be used for a parent’s medical care without losing tax benefits or counting as taxable income; the bill updates the HSA and Archer MSA rules, and explicitly allows FSAs/HRAs to cover a parent’s care.
• When: Applies to eligible amounts or expenses paid or incurred after December 31, 2024.