Congress expands tax breaks for wearable health devices—but only for the insured

What it does

This bill allows people to use pre-tax health savings accounts (HSAs), Archer MSAs, and flexible spending arrangements to pay for wearable health devices—like smartwatches, fitness trackers, and health-monitoring software—up to $375 per year. The devices must collect health data or assist in diagnosing or treating medical conditions. The change takes effect January 1, 2026.

Why we flagged it

The bill's core function is to expand the definition of qualified medical expenses under existing health savings accounts to include wearable health devices, creating a tax incentive for their adoption. It is a straightforward tax-code amendment with no hidden mechanism.

What the text implies

• The $375 annual cap may incentivize lower-cost wearable devices, potentially favoring mass-market consumer-grade trackers over clinical-grade or prescription devices.
• Defining 'wearable device' to include software and subscriptions may create ambiguity about what qualifies—e.g., whether a general fitness app with health features counts, or only medical-grade apps.
• The provision benefits primarily those with HSAs or FSAs, which are more common among higher-income and employer-insured populations, potentially widening the health-tech access gap for uninsured or lower-income individuals.
• Wearable-device manufacturers and health-app developers gain a new revenue stream as pre-tax purchasing power expands, though the $375 cap limits the per-user subsidy.

Who it affects

Ordinary people with health savings accounts gain a tax advantage by using pre-tax dollars for wearable health devices, reducing out-of-pocket costs. The $375 annual cap is modest but meaningful for those who use such devices. No clear public cost is imposed; the revenue loss to the Treasury is the trade-off for expanded health-savings flexibility.

Who stands to gain

• wearable device manufacturers (Apple Watch, Fitbit, Garmin, Oura, etc.)
• health-monitoring software and app developers
• smartwatch and fitness-tracker makers
• health-tech subscription services

Named in the bill

Internal Revenue Code Section 223 (HSA), Internal Revenue Code Section 220 (Archer MSA), Internal Revenue Code Section 106 (employer health plans), Internal Revenue Code Section 105 (reimbursements), wearable device manufacturers, health-tech software developers, Treasury Department (revenue impact)

Where it stands

2 cosponsors: 2 Democrats.

• Jun 26, 2025 — Introduced · Congress.gov: “Introduced in House”
• Jun 26, 2025 — Referred to House Committee on Ways and Means · Congress.gov: “Referred to the House Committee on Ways and Means”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

1 lobbying clients named this bill on 1 disclosure filings across 1 quarter, Jun 2026 to Jun 2026. Those filings disclosed $2,740,000 in lobbying spend. A filing names 14 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 0% of bills with at least one filing.

David Schweikert, the sponsor, reported $596,527 in PAC receipts in the 2026 cycle.

• Apple Inc — $2,740,000 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.