Contribution eligibility

(a) Amend § 223(c)(1)(C) of the Internal Revenue Code of 1986 by striking for a service-connected disability (within the meaning of section 101(16) of title 38, United States Code) so that individuals eligible for veterans benefits (even without a service-connected disability) may contribute to a Health Savings Account (HSA). Effective for taxable years beginning after December 31, 2025. (b) Amend Section 223(c)(1). For purposes of this section, an eligible individual any individual who has served in the active military, naval, air, or space service (as defined in section 101(24) of title 38, United States Code) and who was discharged or released therefrom under conditions other than dishonorable. (c) Amend Section 223(c)(1)(C) of the Internal Revenue Code of 1986 is amended by striking for a service-connected disability (within the meaning of section 101(16) of title 38, United States Code). (d) Coordination with veterans’ benefits. Nothing in this Act shall be construed to reduce or limit the eligibility of an eligible veteran for veterans benefits under title 38, United States Code, or to cause duplication of benefits. If a device or treatment is already fully covered by the veteran’s benefit program, HSA funds may still be used for cost-sharing or for supplementary items not covered. (e) Effective date. The amendments made by this section shall apply to distributions from HSAs for taxable years beginning after December 31, 2025.