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H 783

MEDICAL SAVINGS ACCOUNTS – Amends existing law to include health care sharing ministries as an eligible medical expense.

68th Legislature, 2nd Regular Session (2026)

Idaho HB 783 allows Health Care Sharing Ministry expenses to be eligible medical expenses for Medical Savings Accounts starting Jan 1, 2027.

Reported Printed and Referred to Revenue & Taxation
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Bill Summary · H 783

Overview

House Bill 783 (H 783), introduced in Idaho's 68th Legislature (2026), would amend the Medical Savings Account (MSA) statute to explicitly include expenses paid to or through Health Care Sharing Ministries (HCSMs) as eligible medical expenses. The bill sets forth how MSAs work, adjusts definitions, and maintains existing tax deduction rules, with an effective date of January 1, 2027.

Main purpose and intent

  • To expand the range of eligible medical expenses for Idaho MSAs to include costs paid to Health Care Sharing Ministries (HCSMs).
  • To align Idaho tax policy with emerging funding arrangements used by HCSMs, ensuring that members can receive the same tax advantages on eligible health expenses as they do for traditional medical costs.
  • To provide clarity for taxpayers and depositories by updating definitions and administrative provisions around MSAs.

Key provisions and changes

  • Eligible medical expenses (definition): The bill adds expenses paid by the account holder as a member of a health care sharing ministry (as defined in Idaho Code) and the spouse, dependents, and dependent children of the account holder, to the list of "eligible medical expenses" under Section 63-3022K.
  • Existing MSA framework retained:
    • Annual contributions and deductions: Prior rules allow deductions for up to $2,000 per person (1995) and up to $10,000 per year (from 2014 onward). These remain in place, with deductions applying to both contributions and interest if not previously deducted.
    • Definitions (account holder, dependent, dependent child, depository, long-term care, etc.) retained, with updated alignment to include HCSMs in eligible expenses.
  • Administrative and reporting provisions: Depositories must report relevant information to the Idaho State Tax Commission in the standard format used for interest-bearing accounts; account holders must provide their MSA account number and depository on tax forms.
  • Transfers, penalties, and withdrawals: Current rules on penalties, age-based exceptions, death distributions, reimbursements, and redeposits remain intact; new inclusion of HCSM expenses under eligible medical expenses is the notable substantive change.
  • Effective date: The act becomes fully effective on January 1, 2027.

Who/what is affected

  • Idaho taxpayers who participate in Medical Savings Accounts.
  • Depositories and financial institutions that hold MSAs for Idaho account holders.
  • Members of Health Care Sharing Ministries and their spouses/dependents who incur eligible medical expenses paid through HCSMs, as those expenses would now qualify for MSA deductions.
  • State tax administration (Idaho State Tax Commission) through reporting requirements.

Procedural and timeline aspects

  • Legislative action type: Amends existing Idaho Code (63-3022K) to revise definitions and include HCSMs as eligible expenses; provides technical corrections.
  • Effective date: January 1, 2027.
  • Fiscal note (provided by proponents): Estimates 7,500 Idaho households participate in HCSMs; with adoption of MSAs among HCSM participants at ~10.4% (federal HSA benchmark), about 780 Idaho households could use MSAs. Potential annual tax revenue impact: approximately $248,040 not collected at current rate, based on a sample of shared fee amounts and tax rate assumptions. Personal tax savings are estimated at about $320 per year per participating household.

Summary of potential impact

  • Taxpayer impact: Idaho residents with MSAs could deduct eligible medical expenses paid via HCSMs, increasing tax-advantaged treatment of these expenses for eligible participants.
  • Revenue impact: Minor potential loss of state tax revenue, contingent on HCSM participation rates and MSA adoption; the fiscal note provides a rough estimate under stated assumptions.
  • Administrative impact: Moderate, primarily involving alignment of MSA reporting with existing practice and ensuring HCSM expenses are recognized as eligible.

If you’d like, I can provide a concise one-page briefing or a comparison with current Idaho MSA rules to highlight all changes side-by-side.

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

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