Tax-free health accounts could cover wearable devices under new bill

What does this do?

The WEAR IT Act would add qualifying wearable health devices to the list of approved medical expenses under tax law, allowing people to pay for them with pre-tax dollars from HSAs, FSAs, and similar accounts. A device qualifies if it is worn on the body, tracks physical health data for medical purposes, or helps diagnose or treat a health condition. Spending through this provision is capped at $375 per year, and the change would take effect January 1, 2026.

Who does it affect?

The bill affects anyone holding an HSA, FSA, Health Reimbursement Arrangement, or Archer Medical Savings Account, covering tens of millions of Americans, especially those with employer-sponsored or high-deductible health plans. Makers and sellers of wearable health technology would also be affected, as qualifying products could become more affordable for consumers using pre-tax dollars.

Why does it matter?

Wearable devices whose software or hardware meets the medical-purpose requirement in the bill would become eligible for pre-tax purchasing, potentially shifting consumer demand toward qualifying products. Not all fitness or wearable gadgets would automatically qualify, so the distinction between qualifying and non-qualifying devices would carry financial consequences for both consumers and manufacturers.

What does it cost, and who pays?

• $375/year cap per account holder
• Pre-tax dollars from HSA, FSA, or similar
• Effective January 1, 2026