This bill amends the Internal Revenue Code to allow individuals eligible for Indian Health Service assistance to maintain health savings accounts (HSAs). It ensures that receiving care from the Indian Health Service or a tribal organization does not disqualify them from having an HSA, effective for taxable years after 2024.
John Moolenaar
Representative
MI-2
The Native American Health Savings Improvement Act amends the Internal Revenue Code to allow individuals eligible for Indian Health Service (IHS) assistance to maintain health savings accounts (HSAs). Receiving care from the IHS or a tribal organization will not disqualify individuals from having an HSA, ensuring they can save for healthcare expenses. This change applies to taxable years after December 31, 2024.
New Bill Lets Native Americans Use Health Savings Accounts Alongside IHS Services, Starting 2025
This bill straight-up changes a rule in the tax code to help Native Americans save money on healthcare. Starting after December 31, 2024, if you're eligible for Indian Health Service (IHS) assistance, you can also have a Health Savings Account (HSA) without getting penalized. Basically, it clarifies that getting care from IHS or a tribal organization doesn't count as having "other health coverage" that would normally block you from using an HSA.
Opening Up Options
This is all about fixing a snag in the system. Before this, if you were getting IHS services, the IRS could say you were already "covered" and couldn't use an HSA. HSAs let you put money aside, tax-free, for medical expenses. This bill, the "Native American Health Savings Improvement Act" says that getting IHS care doesn't disqualify you from having that extra savings option.
Real-World Impact
Think of someone running a small business on tribal land, or a teacher working at a reservation school. They get their basic care through IHS, but maybe they want an HSA for things like dental work, specialist visits, or just to have a cushion for unexpected medical bills. This law lets them do that. They can use IHS and have the tax benefits of an HSA, giving them more control over their healthcare finances.
The Bottom Line
The law makes it clear that getting care through IHS or a tribal organization is not the same as having a disqualifying health plan (SEC. 2). The change kicks in for any tax year starting after December 31, 2024. No more choosing between IHS and an HSA—people can have both. It's a practical fix that could make a real difference in managing healthcare costs for many Native Americans.