H.R.955 - Health Out-of-Pocket Expense Act of 2025; HOPE Act of 2025 (119th Congress)
Summary
H.R. 955, the Health Out-of-Pocket Expense Act of 2025 (HOPE Act of 2025), proposes to amend the Internal Revenue Code of 1986 by introducing a new type of tax-advantaged health savings account called a 'HOPE Account'. These accounts would be used to pay for qualified medical expenses. The bill outlines eligibility requirements, contribution limits, and tax treatment of distributions, and also addresses employer contributions and potential penalties for non-compliance.
Expected Effects
The HOPE Act aims to provide individuals with a new avenue for saving and paying for healthcare expenses, potentially reducing the financial burden of out-of-pocket costs. It introduces complexities to the existing healthcare savings landscape, requiring careful coordination with other health savings arrangements like HSAs and FSAs. The bill also introduces new reporting requirements for both trustees and employers.
Potential Benefits
- Provides a new tax-advantaged savings option for healthcare expenses.
- Could lead to increased consumer control over healthcare spending.
- May encourage individuals to save for future medical needs.
- Could potentially reduce reliance on government-funded healthcare programs for some individuals.
- Allows for employer contributions, potentially incentivizing employer-sponsored health savings.
Potential Disadvantages
- Adds complexity to the existing healthcare savings account landscape, potentially causing confusion.
- May disproportionately benefit higher-income individuals who can afford to contribute.
- Could lead to decreased enrollment in traditional health insurance plans if individuals opt for HOPE Accounts instead.
- Introduces new reporting requirements for trustees and employers, increasing administrative burden.
- The contribution limits and eligibility requirements may exclude some individuals from participating.
Most Disadvantaged Areas:
Constitutional Alignment
The bill's alignment with the US Constitution primarily falls under the purview of Congress's power to tax and spend for the general welfare, as outlined in Article I, Section 8. The creation of tax-advantaged accounts and the regulation of healthcare fall within this broad authority. However, the specific provisions of the bill would need to be carefully examined to ensure they do not infringe upon any individual rights or liberties protected by the Constitution or its amendments.
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).