Health Marketplace and Savings Accounts for All Act

Bill Number: S. 3362
Origin Chamber: Senate
Congress: 119th Congress, Session 1
Policy Area: Taxation
Status: Introduced
Latest Action: 2025-12-04: Read twice and referred to the Committee on Finance.
Last Updated: 2026-06-30T15:14:09Z

AI-Generated Summary

Purpose of the Legislation

The "Health Marketplace and Savings Accounts for All Act" (S. 3362) aims to expand access to and flexibility in using Health Savings Accounts (HSAs) by removing certain restrictions and increasing contribution limits. It also creates a new framework for "health marketplace pools" to offer group health plans or insurance, including specialized drug coverage, to broaden health coverage options for individuals and small groups.

Key Provisions

Title I: Health Savings Accounts For All Act of 2025
Increases annual HSA contribution limits to match those for 401(k) retirement plans (currently around $23,000 for 2024, adjusted for inflation), with an additional catch-up contribution for those aged 50 or older (currently $7,500).
Eliminates the requirement that individuals must have a high-deductible health plan (HDHP, a type of insurance with higher out-of-pocket costs but lower premiums) to contribute to or use an HSA.
Allows HSA funds to cover premiums for health insurance or direct primary care arrangements (fixed-fee access to basic doctor visits).
Permits reimbursement from HSAs for certain medical expenses incurred in the same or prior tax year, even before the account is opened (if opened by tax filing deadline).
Provides a grace period for correcting administrative errors (like over-contributions) before tax filing deadlines, without penalties if net income is reported.
Enables tax-free rollovers of HSA funds to a child, parent, or grandparent upon the account holder's death.
Expands qualified HSA expenses to include vitamins, dietary supplements, gym memberships, and wearable fitness trackers (e.g., smartwatches for health monitoring).
Grants HSAs the same bankruptcy protections as individual retirement accounts (IRAs), shielding them from creditors.

Title II: Health Marketplace for All Act of 2025
Defines "health marketplace pools" (groups of individuals, self-employed people, or small businesses) as "employers" under the Employee Retirement Income Security Act (ERISA, a federal law regulating employee benefit plans), allowing them to offer group health plans or insurance.
Requires pools to be formed for legitimate risk-sharing purposes, without discriminating based on health status (e.g., pre-existing conditions).
Permits pools to offer uniform coverage to all members (and their dependents), with options for self-insurance or contracts with insurers; rates can vary by policy but must comply with nondiscrimination rules.
Allows pools to provide drug-only coverage, including over-the-counter medications, as a standalone benefit.
Clarifies that pool membership does not create "joint employer" status under labor laws, protecting participants from unintended legal ties.
Enables administrative services like billing and enrollment, and allows multiple pools in the same area.

All changes apply to tax years beginning after enactment, except bankruptcy provisions (for cases after enactment).

Significant Changes to Existing Law

HSA Reforms (Internal Revenue Code Section 223): Removes the HDHP eligibility mandate, decoupling HSAs from specific insurance types and making them available to anyone. Ties contribution limits to retirement accounts for higher savings potential. Expands reimbursable expenses beyond traditional medical care, redefining "qualified medical expenses" to include preventive wellness items.
ERISA Amendments: Introduces health marketplace pools as a new entity type for group coverage, bypassing some barriers for non-employers (e.g., freelancers). Explicitly allows drug-only group plans, which were previously limited. Updates definitions to avoid fiduciary liabilities for pool members and ensures state law alignment for dependents (e.g., spouses and children).
These shifts move HSAs toward a more universal savings tool, similar to retirement accounts, and promote pooled insurance models outside traditional employer-sponsored plans.

Potential Impacts

On Citizens: Increases tax-advantaged savings for healthcare (pre-tax contributions, tax-free growth, and withdrawals for qualified uses), potentially lowering out-of-pocket costs and encouraging preventive care. Broader HSA eligibility could benefit millions without HDHPs, including those with low-deductible plans. Marketplace pools may improve access to affordable group coverage for self-employed individuals, gig workers, and small groups, including niche drug benefits.
On Government Agencies: The IRS will handle higher HSA contributions and expanded deductions, possibly reducing short-term tax revenue but increasing administrative workload for compliance (e.g., error corrections). The Department of Labor (overseeing ERISA) may see more oversight of new pools. No direct international relations impact, as this is domestic tax and benefits law.
Overall: Could reduce reliance on individual marketplace plans under the Affordable Care Act (ACA), potentially stabilizing premiums in pools through risk-sharing but straining federal subsidies if fewer people qualify for ACA aid.

Main Stakeholders Affected

Individuals and Families: Primary beneficiaries through easier HSA access and expanded uses; self-employed or uninsured gain from pools.
Employers and Small Businesses: Can join or form pools for cost-effective group coverage without full employer responsibilities; part-time workers get tailored rules.
Health Insurers and Providers: Opportunity to contract with pools for group plans, including drug-focused options; primary care providers benefit from HSA coverage of fixed-fee services.
Financial Institutions: HSA trustees (e.g., banks) may manage larger accounts with added bankruptcy protections.
Government and Regulators: IRS, Department of Labor, and states enforce rules; taxpayers indirectly affected via revenue changes.

Notable Legal, Constitutional, or Political Implications

Legal: Enhances ERISA's flexibility without altering core protections against health discrimination (e.g., under ACA Sections 701-702). Bankruptcy change aligns HSAs with federal exemptions under U.S. Code Title 11, promoting savings security. Potential challenges if pools lead to uneven state regulation of dependents.
Constitutional: Neutral; supports equal protection by broadening access without favoring groups, but could face scrutiny if seen as undermining ACA mandates (though it removes none directly).
Political: Promotes market-based health reforms by empowering individuals and pools, aligning with efforts to reduce government involvement in insurance. May spark debate on tax expenditures (lost revenue from HSAs estimated in billions) and equity for low-income groups without employer benefits. Neutral on partisanship, but echoes calls for HSA expansion in conservative policy circles.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Sen. Paul, Rand [R-KY]

Recent Actions

2025-12-04: Read twice and referred to the Committee on Finance.
2025-12-04:
2025-12-04: Introduced in Senate

Bill Versions

Health Marketplace and Savings Accounts for All Act — issued 2025-12-04 — PDF (26 pages)