Healthcare Affordability Accounts

(a) In general Section 223 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: (i) Healthcare Affordability Accounts For purposes of this section— (1) In general In the case of a Healthcare Affordability Account, this section shall be applied as provided in paragraphs (3) through (7). (2) Healthcare Affordability Account The term Healthcare Affordability Account means a health savings account, determined as provided in this subsection. (3) Treatment of transferred contributions Amounts transferred to a Healthcare Affordability Account pursuant to section 1412 of the Patient Protection and Affordable Care Act shall not be taken into account in determining the deduction allowed by subsection (a). (4) Account must be only HSA of individual (A) In general An individual who has a Healthcare Affordability Account shall not be treated as an eligible individual with respect to any health savings account other than such Healthcare Affordability Account. (B) Rollover of existing account permitted An individual on whose behalf a Healthcare Affordability Account is established may roll over the balance of any other health savings account of the individual to such Healthcare Affordability Account according to the rules of subsection (f)(5). (5) No rollovers permitted Except as provided in paragraph (4)(B), subsection (f)(5) shall not apply and no amount shall be contributed from a Healthcare Affordability Account to any health savings account other than a Healthcare Affordability Account. (6) Restriction on use of amounts No amounts in a Healthcare Affordability Account may be used to pay for any— (A) gender transition procedures, or (B) abortion. (7) Definitions For purposes of paragraph (6)— (A) Gender transition procedure (i) In general The term gender transition procedure means any hormonal or surgical intervention for the purpose of gender transition, including— (I) gonadotropin-releasing hormone (GnRH) agonists or other puberty-blocking or suppressing drugs to stop or delay normal puberty; (II) testosterone, estrogen, progesterone, or other androgens to an individual at doses that are supraphysiologic to what would normally be produced endogenously in a healthy individual of the same age and sex; (III) castration; (IV) orchiectomy; (V) scrotoplasty; (VI) implantation of erection or testicular prostheses; (VII) vasectomy; (VIII) hysterectomy; (IX) oophorectomy; (X) ovariectomy; (XI) reconstruction of the fixed part of the urethra with or without a metoidioplasty or a phalloplasty; (XII) metoidioplasty; (XIII) penectomy; (XIV) phalloplasty; (XV) vaginoplasty; (XVI) clitoroplasty; (XVII) vaginectomy; (XVIII) vulvoplasty; (XIX) reduction thyrochondroplasty; (XX) chondrolaryngoplasty; (XXI) mastectomy; (XXII) tubal ligation; (XXIII) sterilization; (XXIV) any plastic, cosmetic, or aesthetic surgery that feminizes or masculinizes the facial or other physiological features of an individual; (XXV) any placement of chest implants to create feminine breasts; (XXVI) any placement of fat or artificial implants in the gluteal region; (XXVII) augmentation mammoplasty; (XXVIII) liposuction; (XXIX) lipofilling; (XXX) voice surgery; (XXXI) hair reconstruction; (XXXII) pectoral implants; and (XXXIII) the removal of any otherwise healthy or non-diseased body part or tissue. (ii) Exclusions The term gender transition procedure does not include the following when furnished to an individual by a health care provider with the consent of such individual or, if applicable, such individual’s parents or legal guardian: (I) Services to individuals born with a medically verifiable disorder of sex development, including an individual with external sex characteristics that are irresolvably ambiguous, such as an individual born with 46 XX chromosomes with virilization, an individual born with 46 XY chromosomes with undervirilization, or an individual born having both ovarian and testicular tissue. (II) Services provided when a physician has otherwise diagnosed a disorder of sexual development in which the physician has determined through genetic or biochemical testing that the individual does not have normal sex chromosome structure, sex steroid hormone production, or sex steroid hormone action for a healthy individual of the same sex and age. (III) The treatment of any infection, injury, disease, or disorder that has been caused by or exacerbated by the performance of gender transition procedures, whether or not the gender transition procedure was performed in accordance with State and Federal law or whether or not funding for the gender transition procedure is permissible under this section. (IV) Any procedure undertaken because the individual suffers from a physical disorder, physical injury, or physical illness (but not mental, behavioral, or emotional distress or a mental, behavioral, or emotional disorder) that would, as certified by a physician, place the individual in imminent danger of death or impairment of major bodily function, unless the procedure is performed. (V) Puberty suppression or blocking prescription drugs for the purpose of normalizing puberty for a minor experiencing precocious puberty. (VI) Male circumcision. (B) Gender transition The term gender transition means the process in which an individual goes from identifying with or presenting as his or her sex to identifying with or presenting a self-proclaimed identity that does not correspond with or is different from his or her sex, and may be accompanied with social, legal, or physical changes. (C) Sex The term sex, when referring to an individual’s sex, means to refer to either male or female, as biologically determined. (D) Female The term female, when used to refer to a natural person, means an individual who naturally has, had, will have, or would have, but for a congenital anomaly, historical accident, or intentional or unintentional disruption, the reproductive system that at some point produces, transports, and utilizes eggs for fertilization. (E) Male The term male, when used to refer to a natural person, means an individual who naturally has, had, will have, or would have, but for a congenital anomaly, historical accident, or intentional or unintentional disruption, the reproductive system that at some point produces, transports, and utilizes sperm for fertilization. (F) Abortion (i) In general The term abortion means— (I) drugs or procedures used with the primary intent to end the life of the human being in the womb, (II) pre-viable delivery not described in clause (ii), and (III) post-viable delivery with intentional death of the fetus. (ii) Exclusions Such term does not include— (I) separation of the mother and her embryo or fetus to prevent the mother’s death or immediate irreversible bodily harm, which cannot be mitigated in any other way, (II) treatment of ectopic or molar pregnancy, (III) treatment of miscarriage, or (IV) any service described in clause (i) in the case of a pregnancy which is the result of an act of rape or incest.. (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2026.