Sponsors (8)
The bill stops use of most tax-advantaged accounts to pay for elective abortions—reducing indirect taxpayer subsidization—but raises out-of-pocket costs and access barriers (especially for low-income women) and creates privacy and compliance risks.
Women who are rape or incest survivors or who have physician-certified life‑threatening or serious physical conditions will still be able to use tax-advantaged accounts for abortions under the bill's narrow exceptions.
Taxpayers who oppose public funding for elective abortions will no longer have tax-advantaged accounts subsidize most elective abortion payments.
Women — especially low-income individuals — seeking non-exempt abortions will face higher out-of-pocket costs and greater financial barriers because HSAs, FSAs, HRAs, Archer MSAs, and retiree health accounts cannot be used for payment or reimbursement.
Patients seeking excluded abortions will face increased privacy risks if employers or insurers must verify rape, incest, or physician certifications to permit reimbursement.
Employers, insurers, and plan administrators will incur new administrative/compliance burdens and complexity in distinguishing exempt versus non-exempt abortions and verifying required certifications or evidence.
Based on analysis of 2 sections of legislative text.
Stops most abortion payments from qualifying as tax-free in HSAs, MSAs, FSAs, HRAs, and certain retiree health accounts, with narrow exceptions for rape, incest, or physician-certified life/serious-threat cases.
Prohibits using tax-advantaged medical accounts and employer health reimbursements to pay for most abortions, with narrow exceptions for pregnancies resulting from rape or incest or when a physician certifies the abortion is necessary to save the woman’s life or address a serious physical illness or injury. The changes amend the Internal Revenue Code to exclude non-exempt abortion payments from Health Savings Accounts (HSAs), Archer MSAs, health flexible spending arrangements (FSAs), health reimbursement arrangements (HRAs), and certain retiree health account rules, effective for taxable years beginning after December 31, 2025.
Official title: Amend the Internal Revenue Code of 1986 to prohibit treatment of certain distributions and reimbursements for certain abortions as qualified medical expenses.
Introduced January 24, 2025 by Mike Lee · Last progress January 24, 2025