Sponsors (3)
The bill makes wearable health technology modestly more affordable for people with tax-advantaged accounts and for employers that reimburse them, but the small $375 cap, exclusion of those without such accounts, revenue loss, and potential administrative ambiguity limit its reach and effectiveness.
People with chronic conditions who have HSAs/FSAs/HRAs can use up to $375 per year tax-free for qualifying wearable devices, making monitoring/treatment more affordable and likely improving health management.
Taxpayers who hold HSAs/Archer MSAs/FSAs/HRAs receive lower after-tax costs for eligible wearable purchases or subscriptions (up to $375/year), reducing the effective price of these health products for account holders.
Employers that offer FSAs/HRAs can reimburse employees for eligible wearables, which may improve employee wellness, reduce health risks, and support workplace health programs.
Low-income, uninsured, or workers without access to HSAs/FSAs/HRAs (often those who need help most) are largely excluded from the benefit, so the policy primarily helps people with employer-sponsored accounts.
The $375 annual cap may be inadequate for some medically necessary or higher-cost devices, leaving patients to cover remaining costs out-of-pocket and limiting clinical benefit for those needing more expensive technology.
Expanding tax-preferred coverage for wearables reduces federal tax revenue modestly, which could increase budget pressures or crowd out other spending unless offsets are identified.
Based on analysis of 2 sections of legislative text.
Allows up to $375/year for qualifying wearable devices (including software/subscriptions) to qualify as medical expenses for HSAs, Archer MSAs, FSAs, and HRAs.
Introduced June 26, 2025 by David Schweikert · Last progress June 26, 2025
Allows limited tax-preferred treatment for certain wearable health devices by letting up to $375 per tax year of amounts paid for defined "wearable devices" be treated as medical care for Health Savings Accounts (HSAs) and Archer MSAs, and reimbursable under employer-provided flexible spending arrangements (FSAs) and health reimbursement arrangements (HRAs). The rule covers devices and related software/subscriptions that collect or analyze physiological data for diagnosis, mitigation, treatment, or prevention, or that assist in diagnosis or provide treatment. The HSA and Archer MSA change applies to amounts paid after December 31, 2025; the FSA and HRA reimbursement rule applies to expenses incurred after December 31, 2025. The benefit is capped at $375 per taxable year and is narrowly limited to items meeting the bill's definition of a "wearable device."