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Bill

Bill

SB 25

Enacting the insurance savings account act, allowing individuals and corporations to establish insurance savings accounts with certain financial institutions, providing eligible expenses, requirements and restrictions for such accounts and establishing addition and subtraction modifications under the Kansas income tax act.

2025-2026 Regular Session

Kansas SB 25 creates tax-advantaged Insurance Savings Accounts allowing pre-tax contributions for eligible insurance expenses, reducing state income tax revenue through new deductions and modifications.

Died in Committee
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WeVote Research Nonpartisan
Bill Summary · SB 25

Legislative bill overview

SB 25 establishes Insurance Savings Accounts (ISAs) in Kansas, allowing individuals and corporations to set aside pre-tax funds with qualified financial institutions to pay for eligible insurance expenses. The bill defines eligible expenses, operational requirements, and creates corresponding tax modifications under Kansas income tax law to support these accounts.

Why is this important

ISAs could provide a tax-advantaged mechanism for healthcare and insurance cost management, similar to Health Savings Accounts (HSAs). The tax modifications mean foregone state revenue, while potential benefits depend on account uptake and whether expenses genuinely shift to pre-tax savings versus simply changing how existing expenses are paid.

Potential points of contention

  • Revenue impact: Tax deductions for contributions and modifications reduce state income tax receipts; the fiscal cost depends on participation rates and expense definitions not fully detailed in the bill summary
  • Eligibility definition: "Eligible expenses" require clarification—whether limited to health insurance premiums, all insurance types, or broader healthcare costs will significantly affect usage and policy intent
  • Administrative burden: Financial institutions face new compliance requirements; unclear whether the bill provides adequate regulatory framework, reporting standards, and enforcement mechanisms

Compiled from official sources — confirm details with the bill’s official record.

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