Sponsors (3)
The bill makes wearable health technology more affordable and easier to obtain through modest pre-tax reimbursements and employer reimbursements, but it leaves coverage gaps for expensive devices, creates administrative and audit risks, and has a small fiscal cost.
People with HSAs, FSAs, HRAs, or Archer MSAs can use pre-tax dollars to pay up to $375/year for qualifying wearable health devices, lowering their out-of-pocket costs for monitoring and treatment tools.
Patients who rely on wearable devices gain easier access to monitoring and treatment tools (and related subscriptions), which may improve diagnosis, disease management, or prevention.
Employers offering FSAs/HRAs can reimburse employees for wearable-device purchases and subscriptions, increasing the practical value of workplace health benefits.
Patients needing higher-cost therapeutic devices may still face substantial residual expenses because the $375 annual cap may be insufficient for many clinically necessary devices.
Employers and plan administrators must update plan documents and payment systems to implement the new reimbursement rules, creating administrative burdens and transition costs.
Broad wording that includes software and subscriptions may trigger disputes over whether specific devices or services qualify, increasing IRS reviews, audits, or appeals for taxpayers and employers.
Based on analysis of 2 sections of legislative text.
Permits up to $375/year for qualifying medically oriented wearable devices and related software/subscriptions as qualified medical expenses for HSAs, FSAs, HRAs, and Archer MSAs.
Introduced June 26, 2025 by David Schweikert · Last progress June 26, 2025
Allows up to $375 per tax year for certain medically oriented wearable devices and related software or subscriptions to be treated as qualified medical expenses for HSAs, Archer MSAs, health FSAs, and HRAs. The change explicitly defines covered "wearable devices" as body-worn devices or software used with such devices that collect/analyze physiological data for diagnosis, treatment, mitigation, prevention, or assist in diagnosis or provide treatment. The HSA and Archer MSA rule applies to amounts paid after December 31, 2025; the FSA and HRA reimbursement rule applies to expenses incurred after December 31, 2025. The bill amends relevant Internal Revenue Code provisions to add this qualified expense category and sets the $375 annual limit.