The National Funeral Directors Association (NFDA) applauds Representative Kevin Hern (R-OK) for introducing The Funeral Coverage Act (H.R. 2436), a forward-thinking bill that would help grieving families manage funeral costs by expanding how Health Savings Accounts (HSAs) can be used.  

This legislation reflects NFDA’s unwavering commitment to ensuring families have greater financial flexibility and peace of mind when they need it most. It also represents a key step toward removing barriers to meaningful memorialization—something every family deserves.

The Funeral Coverage Act would classify funeral and burial expenses as qualified HSA expenses, allowing individuals to use tax-free HSA funds to help cover final arrangements.  When HSA funds are used to pay for qualified medical expenses, those distributions are made on a tax-free basis. 

The current maximum amount that can be contributed to an HSA on an annual basis is $4,300 for an individual and $8,550 for a family. Like an IRA account, when a person sets up an HSA, they name a beneficiary. If the beneficiary is a surviving spouse, the unused portion of the decedent’s HSA passes directly to the spouse and is added to his or her HSA and incurs no tax liability. 

However, the immediate need for the spouse is funds to cover a funeral and burial, rather than have excess funds automatically added to their own HSA. If the decedent died owing medical expenses, the proceeds in the HSA will be used to pay those medical expenses before funeral expenses are paid.

NFDA Senior Vice President, Advocacy Lesley Witter emphasized the significance of the bill, stating, that NFDA research shows only 26.4% of Americans age 40 and older have preplanned and prepaid for their funeral, leaving many families scrambling to cover costs during an already difficult time. The Funeral Coverage Act would provide much-needed relief by giving families access to funds they’ve already saved for health-related expenses.

This bill is one of several NFDA-supported measures that will take center stage during the 2025 NFDA Advocacy Summit, April 9-11 in Washington, D.C. As the leading voice for funeral service on Capitol Hill, NFDA will continue to advocate for legislation that supports both funeral service and grieving families.