The One Big Beautiful Bill Act, passed by the House of Representatives on May 22 and currently being debated in the Senate, contains an additional tax benefit designed to help Americans pay for medical expenses.
This provision expands eligibility for health savings accounts (HSAs), which allow Americans to use pre-tax money to pay for certain medical costs. Contributions to HSAs have so-called “triple tax advantages,” according to Bank of America: contributions to HSAs are tax-deductible, funds in the account can be invested without taxes on gains, and withdrawals for qualified medical expenses are also not taxed.
In addition, HSAs do not have the required minimum distributions (RMDs) that 401 (k) plans have, and funds in an HSA can be used at any time during the account holder’s life, including for non-medical expenses once the holder reaches the age of 65 (though non-medical spending is subject to income tax)….