Homecare for Seniors Act
The Homecare for Seniors Act would expand the range of Health Savings Account (HSA) distributions that are tax-free by adding in-home, qualified home care as an eligible expense. Specifically, it creates a new category called "specified medical care" that includes both traditional medical care (as defined by the existing medical-care rule) and qualified home care. A home-care contract qualifies only if it provides at least three of a set of in-home services (such as assistance with eating, toileting, transferring, bathing, dressing, continence, and medication adherence) and is delivered by a state-licensed provider or otherwise complies with state requirements. The bill also bars contracts between individuals who are related within certain family relationships (the same related-party restrictions used elsewhere in tax law). The changes would apply to tax years beginning after enactment, and a HHS-Treasury campaign would be launched to raise public awareness of these eligible in-home services.
Key Points
- 1Expands HSA-eligible distributions: Qualified home care becomes an eligible medical expense for purposes of tax-free HSA distributions, alongside traditional medical care.
- 2What qualifies as qualified home care: A contract to provide 3 or more of these in-home services in the recipient’s home: eating assistance, toileting, transferring, bathing, dressing, continence, and medication adherence.
- 3Licensure and state compliance: The home-care services must come from a provider licensed by the state to provide such services, or be delivered in a manner consistent with state requirements.
- 4Related-party restriction: The contract cannot be between a service provider and a recipient who are related within the meaning of the related-party provisions (as defined in tax law).
- 5Effective date and awareness campaign: Applies to taxable years beginning after enactment; the Secretary of Health and Human Services, in consultation with the Secretary of the Treasury, must run a public-awareness campaign about which in-home services are eligible for tax-free HSA distributions.