Sponsors (11)
The bill provides clearer rules for tax-advantaged health accounts and plan administrators but does so by restricting use of those accounts for most elective abortions, shifting costs onto people seeking abortion care and creating administrative burdens for employers and plans.
Taxpayers gain clearer, more certain tax rules about which reimbursements from HSAs, MSAs, FSAs, HRAs, and retiree health accounts are allowed beginning in 2026.
Employers, plan administrators, and health plans get regulatory clarity about which abortion-related expenses are nonreimbursable, reducing ambiguity for plan design and compliance.
Women and people seeking most elective abortions will no longer be able to use pre-tax accounts (HSAs, FSAs, HRAs, MSAs, retiree health accounts) to pay for those procedures after 2025, increasing their out-of-pocket costs.
People seeking abortions that do not meet the narrow 'excluded' exceptions (rape, incest, physician-certified life-threatening conditions) may face reduced access to care if they cannot pay privately, raising equity and rights concerns.
Plan administrators and employers will face administrative and compliance costs to update plan documents, systems, and benefit processes to implement the new exclusions.
Based on analysis of 2 sections of legislative text.
Stops HSAs, MSAs, FSAs, HRAs, and certain retiree health accounts from covering most abortion costs, except for rape, incest, or life/serious-health-threat exceptions.
Introduced January 24, 2025 by Josh Brecheen · Last progress January 24, 2025
Prohibits using tax-advantaged health accounts to pay for abortions except in narrow circumstances. The bill changes the Internal Revenue Code so that abortion expenses (other than abortions for rape, incest, or to protect the pregnant person’s life or serious physical health) are not "qualified medical" distributions or reimbursable under HSAs, MSAs, FSAs, HRAs, and certain retiree health accounts. The rule generally takes effect for taxable years beginning after December 31, 2025, and reimbursement rules apply to expenses incurred in taxable years beginning after that date. Plan administrators and taxpayers will need to treat disallowed abortion payments as nonqualified for tax and reimbursement purposes unless they meet the listed exceptions.