HR-317-119
Referred to the House Committee on Ways and Means.
Sponsored by Chip Roy (R-TX)
What it does
This bill would rename Health Savings Accounts (HSAs) as "Health Freedom Accounts" (HFAs), dramatically raise annual contribution limits (from ~$4,300/$8,550 to $12,000/$24,000 for individuals/joint filers), and remove the requirement that account holders be enrolled in a high-deductible health plan. It would also expand the types of expenses that qualify for tax-free withdrawals to include direct primary care, health care sharing ministries, and medical cost-sharing organizations. For workers hired five or more years after enactment, employers would no longer be able to exclude their health plan contributions from the employee's taxable income — a significant change to how employer-sponsored health benefits are taxed.
Who benefits
Higher-income individuals and families with disposable income to maximize the larger contribution limits, who would gain the most from expanded tax deductions. Self-employed individuals and gig workers who lack employer-sponsored coverage and would now qualify without needing an HDHP. Participants in health care sharing ministries and direct primary care arrangements, whose expenses would newly qualify. Health savings account administrators and financial institutions managing larger account balances. Direct primary care providers and health care sharing ministry organizations, which would gain a new tax-advantaged pathway for their members.
Who is hurt
Workers hired five or more years after enactment who would lose the income tax exclusion on employer health contributions, effectively increasing their taxable income. Lower- and middle-income workers who cannot afford to maximize the higher contribution limits and would gain little benefit from the expansion. Traditional insurance carriers and employer-sponsored health plan administrators, who may face reduced enrollment as the tax advantage of conventional plans erodes for newer hires. Employees at companies that may shift away from offering traditional health plans in response to the changed tax treatment. The federal government would forgo significant tax revenue, which could affect funding for other programs.
Supporters argue
Supporters argue that the current HSA system is unnecessarily restrictive, locking millions of Americans — including the self-employed and those in non-traditional health arrangements — out of tax-advantaged savings simply because they lack an HDHP. They contend that raising contribution limits to $12,000/$24,000 gives families a meaningful tool to build health care reserves, reducing dependence on insurance for routine expenses and putting individuals in control of their own health spending. They also argue that eliminating the employer contribution exclusion for future hires levels the playing field between employer-sponsored and individually-directed health coverage, encouraging a more competitive and consumer-driven market.
Opponents argue
Opponents argue that the bill's most valuable benefits — the dramatically higher contribution limits — flow disproportionately to high-income earners who can afford to maximize them, while offering little practical help to lower-income workers who live paycheck to paycheck. They contend that eliminating the employer health plan tax exclusion for workers hired after the five-year mark would effectively erode one of the primary incentives for employers to offer comprehensive health coverage, potentially pushing millions of future workers into less comprehensive arrangements. Critics also note that expanding qualified expenses to include health care sharing ministries — which are not regulated as insurance — could expose participants to uncovered costs with no consumer protections.