Congress expands tax breaks for wearable health devices—but only for the insured
H.R. 4203 — WEAR IT Act · Filed by David Schweikert (R-AZ) · 2 cosponsors · Introduced Jun 26, 2025 · Referred to committee
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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 full analysis lists 4 implications of this text.
Who stands to gain
wearable device manufacturers (Apple Watch, Fitbit, Garmin, Oura, etc.); health-monitoring software and app developers; smartwatch and fitness-tracker makers