Sponsors (3)
The bill makes wearable health technology modestly more affordable for people covered by HSAs/FSAs/HRAs and encourages employer reimbursement, but the benefit is limited by a $375 cap, excludes those without such accounts (risking unequal access), and creates modest revenue and administrative costs.
People with chronic conditions who have HSAs/FSAs/HRAs can use up to $375 per year tax-free for wearable devices and related subscriptions that monitor or treat their condition, lowering their out-of-pocket health costs.
Americans who use HSAs/Archer MSAs/FSAs/HRAs (typically employer plan participants) will face lower after-tax costs for qualifying wearable purchases/subscriptions (up to $375/year), increasing affordability of consumer health technology for account holders.
Employees at employers that offer FSAs/HRAs can receive reimbursements for eligible wearables, encouraging employer-sponsored wellness programs and potentially improving employee health outcomes and reducing employer healthcare costs.
Low-income, uninsured people and workers without access to HSAs/FSAs/HRAs get little or no benefit from this change, so the policy disproportionately helps those already in employer-sponsored plans and may widen access disparities for digital health tools.
People who need medically necessary wearables that cost more than $375 per year will still face significant out-of-pocket expenses because the annual cap may be insufficient.
Ambiguous definitions of what qualifies as a 'wearable device' (including related software/subscriptions) could create administrative burdens and compliance costs for employers, plan administrators, and taxpayers.
Based on analysis of 2 sections of legislative text.
Permits up to $375 per year of spending on qualifying wearable health devices to count as medical care for HSAs/Archer MSAs and be reimbursed by FSAs/HRAs.
Introduced June 26, 2025 by David Schweikert · Last progress June 26, 2025
Allows a limited tax-preferred treatment for certain wearable health devices by letting up to $375 per taxpayer per year of amounts paid for qualifying wearable devices count as medical care for Health Savings Accounts (HSAs) and Archer MSAs and be reimbursable under employer health flexible spending arrangements (FSAs) and health reimbursement arrangements (HRAs). The rule covers wearable hardware plus related software and subscriptions that collect or analyze physiological data or help diagnose, treat, mitigate, or prevent medical conditions. The change applies to amounts paid or expenses incurred after December 31, 2025.