H.R.74 - Freedom for Families Act (119th Congress)
Summary
H.R.74, the Freedom for Families Act, proposes amendments to the Internal Revenue Code of 1986, primarily focusing on health savings accounts (HSAs). The bill aims to allow tax-advantaged distributions from HSAs during periods of qualified caregiving, aligning with the Family and Medical Leave Act of 1993. It also seeks to remove the requirement for a high-deductible health plan to have an HSA and increase the contribution limit to $9,000 (twice that for joint returns).
Expected Effects
The likely effect of this bill is to expand the usability and attractiveness of HSAs. This could lead to more individuals utilizing them for healthcare savings and expenses, particularly during family or medical leave. The increased contribution limit may incentivize greater savings, while the removal of the high-deductible health plan requirement could broaden HSA accessibility.
Potential Benefits
- Greater flexibility in using HSAs for family and medical leave expenses.
- Increased HSA contribution limits, potentially leading to greater healthcare savings.
- Broader access to HSAs by removing the high-deductible health plan requirement.
- Potential for reduced financial strain during periods of qualified caregiving.
- Simplification of HSA regulations by removing outdated or unnecessary provisions.
Potential Disadvantages
- Potential for increased healthcare costs if individuals overutilize HSAs without a high-deductible plan.
- Possible strain on the federal budget due to increased tax-advantaged distributions.
- Risk of HSAs being used as general savings accounts rather than for healthcare expenses.
- Complexity in defining and verifying 'periods of qualified caregiving'.
- Potential for higher-income individuals to benefit disproportionately from increased contribution limits.
Constitutional Alignment
The bill's provisions related to taxation fall under the purview of Congress's power to lay and collect taxes, duties, imposts, and excises as outlined in Article I, Section 8, Clause 1 of the Constitution. The expansion of HSA benefits and contribution limits does not appear to infringe upon any specific constitutional rights or limitations. The bill aims to promote the general welfare by providing greater flexibility and access to healthcare savings accounts.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).