Freedom for Families Act
Freedom for Families Act
Plain Language Summary
# Freedom for Families Act Summary **What the bill would do:** The Freedom for Families Act would make significant changes to Health Savings Accounts (HSAs), which are tax-advantaged savings accounts typically used for medical expenses. Currently, people can only open an HSA if they have a high-deductible health insurance plan. This bill would remove that requirement, allowing anyone to open an HSA regardless of their insurance type.
It would also nearly double the annual contribution limits—from $4,300 to $9,000 for individuals and from $8,550 to $18,000 for families—and add a new provision allowing tax-free HSA withdrawals for caregiving expenses (such as caring for elderly parents or disabled family members). **Who it affects:** This bill primarily affects people saving for healthcare and caregiving costs. It would benefit those who want to save for medical expenses but don't have a high-deductible health plan, as well as families with caregiving responsibilities. It could also impact federal tax revenue, since HSA contributions and withdrawals are tax-advantaged. **Current status:** The bill was introduced in the 119th Congress by Republican Representative Andy Biggs of Arizona and is currently in committee, meaning it has not yet been voted on by the full House of Representatives.
CRS Official Summary
Freedom for Families ActThis bill allows individuals to establish and contribute to a health savings account (HSA) without being enrolled in a high-deductible health plan (HDHP), increases HSA contribution limits, and allows tax-free distributions from an HSA during a period of qualified caregiving.Under current law, individuals may establish and contribute to an HSA if they are covered under an HSA-eligible HDHP. For 2025, HSA contributions are limited to $4,300 for self-only coverage or $8,550 for family coverage (adjusted annually). Individuals who are at least 55 years old may make an additional HSA contribution of up to $1,000 per year. Further, under current law, HSA distributions are tax-free if used to pay for qualified medical expenses. The bill eliminates the HDHP coverage requirement for purposes of an HSA.The bill also increases the HSA annual contribution limit to $9,000 for individuals or $18,000 for joint filers (adjusted annually) and eliminates the additional contribution for individuals who are at least 55 years old.Finally, the bill excludes HSA distributions during a period of qualified caregiving from gross income. The bill defines period of qualified caregiving as any period during which an individual is on leave or not employed due tothe birth or adoption of a child;placement of a foster child;caring for a family member with a serious health condition;an inability to work due to a serious health condition; orcertain emergencies related to a spouse, child, or parent on covered active duty with the Armed Forces.
Latest Action
Referred to the House Committee on Ways and Means.