The HSA Modernization Act of 2023 amends federal tax law to expand access to and flexibility of Health Savings Accounts, which allow people with high-deductible health plans to save pre-tax money for medical expenses. The bill allows veterans eligible for VA benefits without a service-connected disability, seniors enrolled in Medicare Part A due to age, and individuals eligible for Indian Health Service care to open and contribute to HSAs, removing restrictions that previously disqualified them. It also lets people enrolled in bronze-level or catastrophic health plans under the Affordable Care Act qualify for HSAs, permits plans to cover up to $500 in mental health services without a deductible, and allows married couples to combine catch-up contributions into a single account rather than requiring separate accounts. Additional provisions raise the maximum annual contribution limits to match plan deductibles and out-of-pocket maximums, clarify that HSA funds can pay for long-term care services, and give new account holders a 60-day grace period to cover medical expenses incurred just before their HSA was established. Most changes take effect for taxable years or plan years beginning after December 31, 2025, while the long-term care clarification applies to payments made after the bill becomes law, and the legislation affects millions of Americans with high-deductible health coverage, including veterans, seniors, Native Americans, and married couples managing joint health savings.
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