What does Preamble of Fair Care Act of 2026 do?

This bill, formally titled 'To address the high costs of health care services, prescription drugs, and health insurance coverage in the United States, and for other purposes,' aims to address the high costs of healthcare services, prescription drugs, and health insurance coverage in the United States. The bill was introduced in the House of Representatives on May 14, 2026, by Mr. Westerman.

What does MODERNIZATION OF HEALTH SAVINGS ACCOUNTS. of Fair Care Act of 2026 do?

This section modifies Section 223 of the Internal Revenue Code of 1986 to address Health Savings Accounts (HSAs). It establishes rules for deductions allowed for HSA contributions, including limitations based on actuarial value of qualified health plans. The section outlines definitions for terms such as 'eligible individual,' 'qualified plan,' and 'qualified medical expenses.' It provides bankruptcy protections for HSAs, treating them similarly to individual retirement accounts. It allows for the rollover of funds from Flexible Spending Arrangements (FSAs), Archer MSAs, and Health Reimbursement Arrangements (HRAs) to HSAs. Certain health care related tax benefits are terminated, including exclusions for Archer MSAs and FSAs.

What does UNUSED PREMIUM TAX CREDITS MAY BE DEPOSITED IN HEALTH SAVINGS of Fair Care Act of 2026 do?

This section amends Section 36B to allow for unused premium tax credits to be deposited into health savings accounts (HSAs). Taxpayers can elect to have the Secretary deposit excess premium tax credits into their HSAs, provided they meet certain requirements and provide necessary information. Amounts deposited into an HSA under this provision will be included in the taxpayer's gross income and treated as contributions for HSA purposes. The amendments apply to taxable years beginning after the date of enactment of this Act.

What does HEALTH REIMBURSEMENT ARRANGEMENTS AND OTHER ACCOUNT-BASED of Fair Care Act of 2026 do?

This section establishes the legal effect of a rule concerning Health Reimbursement Arrangements and Other Account-Based Group Health Plans. The rule, published by the Internal Revenue Service, the Employee Benefits Security Administration, and the Health and Human Services Department on June 20, 2019, is given the force of law. Health Reimbursement Arrangements are subject to all sections within this title.

What does COST-SHARING REDUCTION PAYMENTS AS ELIGIBLE CONTRIBUTIONS. of Fair Care Act of 2026 do?

This section amends Section 1332 of the Patient Protection and Affordable Care Act to allow states to apply for waivers of certain requirements related to health insurance coverage. A state may apply for a waiver if it provides funding to health savings accounts instead of complying with Section 1402. Applications for waivers must include a 10-year budget plan that is budget neutral for the Federal Government. If a state receives a waiver, the Secretary shall provide an alternative means of transferring funds to the state, equal to the aggregate amount of cost-sharing reductions that would have been paid. The Secretary will determine the amount transferred annually, considering the experience of other states. Section 1402 of the Patient Protection and Affordable Care Act is amended by striking certain phrases related to cost-sharing reduction percentages. Appropriations are made for health benefits coverage through payments to issuers for plan years 2026 through 2030, subject to certain limitations. The bill defines 'health savings account' and 'qualifying insured' for purposes of this subsection.

What does ONE-TIME APPLICATION OF SAVER'S CREDIT TO CONTRIBUTIONS TO of Fair Care Act of 2026 do?

This section allows taxpayers to treat contributions to health savings accounts (HSAs) as qualified retirement savings contributions for purposes of section 25B of the Internal Revenue Code of 1986. This provision applies to an 'applicable taxable year,' which is a year elected by the taxpayer. A taxpayer may elect only one applicable taxable year, and this election must occur within a 3-year period beginning one year after the Act's enactment. The Secretary of the Treasury will specify the time and manner for taxpayers to make this election.

What does GRANTS FOR HEALTH SAVINGS ACCOUNT ASSISTANCE AND OUTREACH. of Fair Care Act of 2026 do?

This section establishes a grant program administered by the Administrator of the Centers for Medicare & Medicaid Services. Eligible entities, including states, trade associations, and nonprofit groups, can apply for grants. Grant funds must be used to distribute information about health savings accounts (HSAs), raise public awareness, facilitate enrollment, and address consumer complaints. The Administrator may distribute up to $5,000,000 annually among grant recipients. The Administrator is required to submit a report to Congress on the effectiveness of the grants. The term 'eligible entity' includes a broad range of organizations, from chambers of commerce to small business development centers.

What does NEW CORPORATIONS REQUIRED TO USE HEALTH SAVINGS ACCOUNTS. of Fair Care Act of 2026 do?

Corporations incorporated after December 31, 2026, are ineligible for tax benefits related to offering employees health insurance. This restriction does not apply to health savings account contributions offered by these corporations.

What does FEDERAL EMPLOYEE HEALTH BENEFITS AND HEALTH SAVINGS ACCOUNTS. of Fair Care Act of 2026 do?

This section amends Section 1312(d)(3)(D) of the Patient Protection and Affordable Care Act. The amendment modifies the subparagraph heading to include 'President, vice president, members of congress, and federal employees'. The amendment updates clauses (i) to refer to 'the President, Vice President, Members of Congress, and Federal employees'. The definition of 'Federal employee' is expanded to include individuals covered by subsections (c) or (f) of section 2105 of title 5, United States Code. Plans offered under chapter 89 of title 5, United States Code, are required to be converted into health savings accounts.

What does GUARANTEED AVAILABILITY OF COVERAGE; PROHIBITING of Fair Care Act of 2026 do?

This section amends the Health Insurance Portability and Accountability Act of 1996 to add a section regarding guaranteed availability of coverage. Health insurance issuers in a State generally must accept every employer and individual that applies for coverage. Issuers may restrict enrollment to open or special enrollment periods. Issuers must establish special enrollment periods for qualifying events. Issuers offering network plans may limit employers to those with eligible individuals within the service area. Issuers may deny coverage if they demonstrate a lack of capacity to deliver services or insufficient financial reserves. Issuers denying coverage due to capacity or financial reasons may face a 180-day suspension from offering coverage. Premium rates in the individual or small group market can vary based on family coverage, rating area, age (not more than 5 to 1), and tobacco use (not more than 1.5 to 1). Group health plans and health insurance issuers may not discriminate based on health status-related factors, including genetic information.

Back to bills

Fair Care Act of 2026

Last updated: 5/14/2026 · Introduced: 5/14/2026

Author: Bruce Westerman (R-AR)

TL;DR (AI)

The bill modifies Health Savings Accounts (HSAs) by allowing rollovers from other accounts and providing bankruptcy protections.
Unused premium tax credits can now be deposited into HSAs, increasing their funding potential.
States can apply for waivers to fund HSAs instead of providing cost-sharing reductions, with budget neutrality requirements.
Health insurance issuers are required to accept all applicants, with limited exceptions based on capacity and financial reserves.
The bill establishes a grant program for outreach and education on HSAs, with up to $5 million available annually.
New corporations must use HSAs for employee health insurance to qualify for tax benefits, while existing corporations are exempt.
The bill enhances telehealth services by expanding coverage and removing geographic restrictions for mental health and emergency care.

119th Congressin committeeOfficial page

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Other Sections

Includes provisions on preamble, modernization of health savings accounts., and 7 more.

9 sections

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TITLE II

-IMPROVING PRIVATE HEALTH INSURANCE

16 sections

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TITLE III

-COMPETITION, TRANSPARENCY AND ACCOUNTABILITY

52 sections

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TITLE IV

-MEDICARE AND MEDICAID REFORMS

34 sections

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