S.1565 - Lowering Costs for Caregivers Act of 2025 (119th Congress)
Summary
S.1565, the Lowering Costs for Caregivers Act of 2025, aims to amend the Internal Revenue Code of 1986 to allow expenses for parents to be considered medical expenses for certain tax-advantaged accounts. This bill was introduced in the Senate on May 1, 2025, and referred to the Committee on Finance. The bill specifically targets Health Savings Accounts (HSAs), Flexible Spending Arrangements (FSAs), Health Reimbursement Arrangements (HRAs), and Archer MSAs.
Expected Effects
If enacted, this bill would allow individuals to use funds from HSAs, FSAs, HRAs, and Archer MSAs to pay for the medical expenses of their parents. This change would provide tax relief to individuals who are caring for their parents. The amendments would apply to amounts paid or expenses incurred after December 31, 2025.
Potential Benefits
- Allows individuals to use pre-tax funds for parents' medical expenses.
- Provides tax relief for caregivers.
- Expands the definition of eligible medical expenses for HSAs, FSAs, HRAs, and Archer MSAs.
- May encourage more people to save for healthcare expenses using these accounts.
- Could reduce the financial burden on families caring for elderly parents.
Most Benefited Areas:
Potential Disadvantages
- May slightly reduce government tax revenue.
- Could increase healthcare spending if people are more willing to use these accounts for parental care.
- The benefits primarily accrue to those who already have and use HSAs, FSAs, HRAs, and Archer MSAs.
- May complicate tax filings for some individuals.
- Potential for misuse or abuse of the expanded definition of medical expenses.
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution, as it seeks to provide financial relief to caregivers. Specifically, the preamble states the Constitution is intended to "promote the general Welfare". Article I, Section 8 grants Congress the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States.
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).