Trump DOUBLES HSA Limits – Fitness, Medicare INCLUDED
Health Savings Accounts are poised for unprecedented expansion under Trump’s new tax reform bill, potentially doubling contribution limits and adding flexibility that could transform how Americans pay for healthcare expenses.
At a Glance
- House Republicans narrowly passed President Trump’s comprehensive tax bill with significant HSA expansions
- Contribution limits will nearly double to $8,600 for individuals and $17,100 for families starting January 2026
- New qualified expenses include gym memberships and fitness costs, capped at $500 for individuals and $1,000 for families
- Americans 65+ on Medicare Part A will be able to continue contributing to HSAs, a major policy shift
- The bill allows rollovers from Flexible Spending Accounts to HSAs, increasing financial flexibility
Major Expansion of Health Savings Accounts
House Republicans have passed President Trump’s comprehensive tax and spending package by a single vote, introducing what supporters are calling the most significant expansion of Health Savings Accounts in American history. The legislation, nicknamed “one big, beautiful bill,” includes provisions that dramatically increase HSA contribution limits and expand the types of expenses that qualify for tax-free withdrawals. These changes aim to provide Americans with greater financial control over their healthcare spending while encouraging long-term medical savings.
The most substantial change comes with the doubling of annual contribution limits to $8,600 for individuals and $17,100 for families, effective January 2, 2026. This represents the largest single increase in HSA contribution limits since the accounts were first introduced. The legislation also maintains the additional $1,000 catch-up contribution for account holders age 55 and older, with a new provision allowing both spouses to make catch-up contributions to the same HSA rather than requiring separate accounts.
New Qualified Expenses and Medicare Integration
The reform package significantly expands the definition of qualified medical expenses for HSA withdrawals. For the first time, gym memberships and fitness expenses will qualify for HSA funds, though these are capped at $500 for single filers and $1,000 for joint filers annually. This change acknowledges the role of preventative health measures in reducing long-term healthcare costs and reflects a more holistic approach to healthcare spending.
“Most people don’t think about the big health hiccups that can occur — unexpected dental costs or hearing aids can cost a small fortune.” Carolyn McClanahan.
Another major policy shift allows individuals aged 65 or older who are enrolled in Medicare Part A to continue contributing to their HSAs. Under current law, Medicare enrollment automatically disqualifies individuals from making new HSA contributions, effectively forcing seniors to stop building their health savings precisely when healthcare costs often increase. This change will allow older Americans to continue growing their tax-advantaged health funds throughout retirement.
Increased Flexibility and Plan Eligibility
The legislation creates new pathways for Americans to maximize their health savings by allowing rollovers from Flexible Spending Accounts (FSAs) to HSAs. This change eliminates the “use it or lose it” problem many FSA holders face at year-end and creates a seamless transition between the two types of healthcare accounts. Additionally, more health insurance plans will qualify as High-Deductible Health Plans (HDHPs) that make policyholders eligible for HSAs, including individual market bronze and catastrophic plans.
“It’s definitely expanding HSAs with new things people can use their HSA dollars for.” Kaye L. Pestaina.
HSAs offer a triple tax advantage: tax-free contributions, growth, and withdrawals for qualified expenses. The 2025 deductible for HDHPs is set at $1,650 for individuals and $3,300 for families. Many employers match HSA contributions, similar to 401(k) plans, and unlike FSAs, HSA funds roll over from year to year with no expiration date. For account holders under 65, withdrawals not used for qualified medical expenses incur a 20% penalty plus income tax, though this penalty disappears after age 65, effectively turning HSAs into supplemental retirement accounts.
