Schmidt proposes law to help Kansans save on insurance costs

Kansas Insurance Commissioner Vicki Schmidt is backing new legislation aimed at helping Kansans set aside money for insurance costs through a state tax-advantaged savings option.

Schmidt testified this week in favor of House Bill 2430, which would establish an Insurance Savings Account, or ISA. The proposal, introduced by the Kansas Department of Insurance, would allow residents to save money tax-free at the state level to cover property and casualty insurance expenses such as home and auto premiums and deductibles.

"Insurance Savings Accounts are a sustainable way for Kansans to save state-tax free for their insurance costs," Schmidt said. "As the legislature works to address affordability, they should include this tool for Kansas families."

If approved, Kansas taxpayers could open an ISA through a financial institution and contribute up to a set annual limit based on their filing status. Funds in the account could then be used for qualified insurance expenses, including premiums and out-of-pocket deductibles. According to the department, a married couple contributing the maximum could save as much as $670 per year on their state taxes.

Supporters say the accounts would give families more flexibility and a dedicated way to budget for rising insurance costs, while providing tax relief.

The bill was heard by the Kansas House Committee on Taxation. It marks the second consecutive year the department has proposed similar ISA legislation.

Schmidt also highlighted the agency's broader consumer protection efforts, noting the department has recovered more than $202 million for Kansas policyholders since she took office in 2019.

The full text of HB 2430 is available on the Kansas Legislature's website.