Proposed Law to Allow Moving FSA/HRA Funds to Health Savings Accounts

Where This Stands

Introduced

Committee

Floor Vote

Passed

Signed

Currently IN_COMMITTEE. The next step in the legislative lifecycle is Floor Vote.

Version history

Only one version on file - nothing to compare yet. As later stages (committee substitute, engrossed, enrolled) are captured, the redline appears here.

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The Frame

What this does

If passed, this bill would change how employees manage their tax-advantaged health savings, potentially allowing them to move existing balances into an HSA rather than losing those funds or leaving them in an account they can no longer use after switching plans.

Who is mentioned in the record

Potentially affected actors named in the source documents. Mention is not a position.

Employees with FSAs or HRAs

Employees would gain the ability to transfer funds from their FSA or HRA to an HSA when switching to a high-deductible health plan.

Employers

Employers would be required to report qualified HSA distributions on employee W-2 forms.

What changed

Current stage: IN_COMMITTEE.

What's next

Floor Vote.

Summary

This bill would allow employees to transfer money directly from their health flexible spending arrangements (FSA) or health reimbursement arrangements (HRA) into a when they switch to a high-deductible health insurance plan. The change is intended to help individuals fund their HSAs when transitioning to new health coverage.

Key Facts

You don't have to trust us. Each fact below is taken straight from the official document - click any one to see the exact passage, highlighted in the original.

Why It Matters

If passed, this bill would change how employees manage their tax-advantaged health savings, potentially allowing them to move existing balances into an HSA rather than losing those funds or leaving them in an account they can no longer use after switching plans.

Frequently Asked Questions

Can I move all my FSA money into an HSA?

The bill limits the transfer amount to the dollar limit set under section 125(i)(1) of the tax code, with higher limits for certain family coverage.

When would this change take effect?

The provisions apply to distributions made after December 31, 2023.

Do I need to report these transfers to the IRS?

Yes, the bill requires that any qualified HSA distribution be reported on the employee's W-2 form.

News Coverage

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Related Legislation

Federal Bill

Health Savings for Families Act of 2023

This bill would allow individuals to contribute to a Health Savings Account (HSA) even if their spouse has a health flexible spending account (FSA). C

Federal Bill

Clarifying Tax Rules for Health Savings Account (HSA) Long-Term Care Payments

This bill updates federal tax law to explicitly allow individuals to use money from their Health Savings Accounts (HSAs) to pay for qualified long-ter

Discoveries

Patterns POLISCOPE noticed across the record. These are observations to investigate, not conclusions.

policy shift90% confidence

Integration of Health Benefit Accounts

The bill represents a shift toward greater portability of health benefit funds by allowing the movement of money between different types of tax-advantaged health accounts.

Internal Revenue Code of 1986

Connected Entities

personMr. Crenshaw“Co-sponsor of the bill”Map →

personMs. Manning“Co-sponsor of the bill”Map →

organizationU.S. Government Publishing Office“Source of the Congressional Bill document”Map →

bill_numberInternal Revenue Code of 1986“The core legislation being amended”Map →

organizationIRS“The IRS is the agency responsible for administering the Internal Revenue Code”Map →

personMrs. Steel“Introduced the bill in the House of Representatives”Map →

Analysis Score

0–100

Significance60
How much this matters to a regular citizen
Controversy20
Intensity of disagreement among stakeholders
Entertainment5
Compellingness for a non-policy-wonk reader
Buzz15
Current news / social attention level