Exploring “The One, Big, Beautiful Bill” and its proposed changes to HSAs.
There has been no shortage of conversation about what’s in the Trump Administration’s “One, Big, Beautiful Bill”, but the headlines that caught my attention for people nearing retirement recently centered on the proposed changes to the laws regarding Health Savings Accounts (HSAs). I decided to dive deeper into Laura Saunders’ article in The Wall Street Journal “Big Tax Breaks for Health Savings Accounts Get Even Better in the GOP Bill” to help explain what these changes mean and how they differ from today’s status quo. Plus, stick around to the end to see if you have been taking advantage of your HSA based on how the laws currently regulate them.
Change for Health Savings Accounts in 2025
There’s a new proposal floating through Congress that could open the door to HSAs for 20 million more Americans. That’s huge. It’s been featured in publications like The Wall Street Journal and Yahoo Finance, and people like Roy Ramthun of HSA Consulting Services—aka “Mr. HSA”—are calling attention to the most important changes.
If this bill passes, it could:
- Lower the threshold for what qualifies as a “high deductible health plan”
- Allow Medicare enrollees to continue contributing to their HSAs
- Simplify the rules for spousal catch-up contributions
- Enable some ACA (Affordable Care Act) plan participants to qualify for HSAs
- Expand eligible withdrawals to include fitness expenses (with some limits)
Whether you’re retiring early, managing health costs on fixed incomes or have felt a strain on your finances due to health costs and taxes, these changes have the potential to impact your outlook with HSAs moving forward.
Why HSAs Matter – Especially for Retirees
An HSA is the only account that can give you a triple tax break:
- Tax-deductible contributions
- Tax-free growth via unused contributions building year over year
- Tax-free withdrawals for qualified healthcare expenses
And here’s the kicker—unlike a Flexible Spending Account (FSA), you don’t lose unused HSA money at year’s end. It keeps growing for you, year after year. Yet, many people treat HSAs like FSAs and use up all their contributions each year. That’s the most common decision I see people making.
Instead, you might want to consider what it would look like to approach your HSA differently. Contribute the maximum to your HSA, but don’t touch it unless absolutely necessary. Pay for current healthcare costs out-of-pocket if you can, and save the HSA funds for retirement. Health costs are a big part of retirement expenses, and your HSA can be a powerful tool to cover those tax-free.
Are You Really Maxing Out Your HSA?
Here’s another surprise: Many people think they’re maxing out their HSA when they’re not. If you’re contributing through payroll deductions—maybe $100 per paycheck—that might only total $2,600 for the year. But for 2025, the actual limits are:
- $4,300 for individuals
- $8,550 for families
- Plus $1,000 catch-up if you’re 55 or older (per eligible person)
And no—you don’t have to stop at your employer’s HSA. You can contribute additional funds on your own or even open a second HSA account if your first provider won’t accept direct contributions. Many people don’t realize that.
What’s Changing in the New Bill?
If the bill passes, here are a few of the proposed improvements I’m most excited about:
- Contributing After Age 65
Right now, you can’t contribute to an HSA once you’re on Medicare. But the new bill may change that—allowing older Americans to keep building this valuable, tax-advantaged resource. - Simplifying Spousal Contributions
Currently, if you’re over 55 and want to make the $1,000 catch-up contribution, each spouse needs their own HSA. That’s a logistical headache. The bill would allow both contributions to go into a single account. - More HSA-Eligible ACA Plans
Many early retirees rely on ACA coverage, but few plans qualify for HSA contributions. This bill could fix that, giving early retirees the same powerful savings tool they enjoyed while working. - Fitness Reimbursements
The bill would allow HSA funds to pay for certain fitness expenses—like gym memberships—up to $500 for individuals and $1,000 for families. There are restrictions (sorry, golf club dues don’t count), but it’s a step toward proactive health management.
HSA Options Regardless of the Bill
Even if none of this legislation passes, there’s still plenty of opportunity to benefit from your HSA today:
- Max it out—not just through payroll, but with direct contributions
- Don’t spend it—pay out of pocket if possible and let your contributions build
- Track your receipts—you can reimburse yourself later, tax-free
- Coordinate with your Medicare decisions—know how enrollment affects your HSA contributions
If the bill passes as it is currently constructed at the time of this blog’s posting, the opportunities to utilize HSAs grow. But even without the changes, an HSA is still one of the most tax-efficient savings tools out there—especially for future healthcare costs in retirement.
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Content
Tax-free growth does not refer to guaranteed growth but that any growth within an HSA can be used tax-free if used for qualifying medical expenses. Results and figures presented within the above links are hypothetical, unaudited and are intended for illustrative purposes only.
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