Action Alert: H.R. 677 Health Freedom and Flexibility Act

Health Freedom and Flexibility Act

First, let’s be clear…. Healthcare is NOT a right. You can Google and YouTube all the debating, all the reasoning as to why, but healthcare did not make the list with our founding fathers and is why supporting this Bill is moving America, moving YOU in the right direction.

This Bill, if passed (with some tweaking of course) would allow each person and family to explore and expand their knowledge on health using tax free dollars, ultimately helping families and I dare say, the entire nation save money, get healthy AND stimulate the economy.

What is a Health Savings Account (HSA)?

HSA is in essence a tax-free personal savings account to be used ONLY for qualified medical expenses (check out the Learn More tab for a comprehensive list) that was approved in 2003 by Congress. Over the last 20 years the HSA rules and regulations have been adjusted as needed. For example, in 2004 the max contribution was $2,600 individual, $5,150 for family and in 2023, $3,650 for an individual, $7,750 for family. When Covid made its debut, hand sanitizers and face masks were added to the list of qualified expenses. Below is a list of the Pro’s and Con’s of a Health Savings Account as it stands today.

Current Pro’s:	Current Con’s
1. Claim a tax deduction	1. must have high deductible health plan
2. excluded from gross income	2. only use for qualified medical expenses
3. interest is tax free	3. 20% penalty for non-qualified withdrawals
4. distribution may be tax free	4. HSA fees
5. yours ‘portable’ if you change jobs	5. medicare recipients cannot make contributions
6. balance rolls over
7. employer may contribute

If Passed:

The H.R. 677 Health Freedom and Flexibility Act, revises provisions relating to health savings accounts (HSA), including to

eliminate the requirement that a participant in an HSA be enrolled in a high-deductible health plan;

repeal certain limitations on deductions for contributions to HSAs;

repeal rules relating to eligible individuals who participate in HSAs;

repeal the limitation on use of HSAs to purchase health insurance;

include certain medical items as medical expenses for HSA purposes, including menstrual care products, over-the-counter medicines, and medically necessary items;
include as HSA-eligible medical expenses, direct primary care, exercise equipment, and dental care items; and
prohibit the use of HSAs to pay for abortions or for insurance that includes coverage for abortions.

Take a moment to email your Representatives to support this Bill! You can also add in the email what services or items you want to see included or excluded in this Bill.

Let YOUR voice be heard!

Feel like digging a bit deeper? Take a look at these helpful links.

The IRS states current Qualified medical expenses. Qualified medical expenses are those expenses that would generally qualify for the medical and dental expenses deduction. These are explained in Pub. 502, Medical and Dental Expenses. Amounts paid after 2019 for over-the-counter medicine (whether or not prescribed) and menstrual care products are considered medical care and are considered a covered expense. For HSA purposes, expenses incurred before you establish your HSA aren’t qualified medical expenses. State law determines when an HSA is established. An HSA that is funded by amounts rolled over from an Archer MSA or another HSA is established on the date the prior account was established. If, under the last-month rule, you are considered to be an eligible individual for the entire year for determining the contribution amount, only those expenses incurred after you actually establish your HSA are qualified medical expenses.

GoodRxHealh is a little more helpful in breaking down qualified and non-qualified expenses.