The End Diaper Need Act of 2025 attaches a focused funding stream to the Social Services Block Grant (SSBG) program to pay for diapers, diapering supplies, medically necessary diapers, and adult incontinence materials and supplies for low‑income families, medically complex children, and adults with disabilities. It increases the baseline SSBG amount used to calculate state allocations and also appropriates additional annual funds that the Secretary must allocate for diaper assistance activities carried out by states and eligible entities.
Separately, the bill amends federal tax code provisions for health savings accounts (HSAs), Archer MSAs, and health flexible spending and reimbursement arrangements so that medically necessary diapers and diapering supplies qualify as reimbursable medical expenses. The act creates new reporting, evaluation, and definitional rules and limits certain administrative uses of funds — changes that matter to state agencies, diaper banks, child care providers, benefits administrators, and anyone tracking public investments in basic needs and child welfare.
At a Glance
What It Does
For fiscal years 2026–2029 the bill deems the SSBG ‘‘amount’’ to be $1.9 billion and appropriates $200 million per year to carry out a diaper assistance program; states must pass increases to eligible entities for distribution of diapers, diapering supplies, and adult incontinence products under specified rules. It also inserts medically necessary diapers and diapering supplies into the list of qualified medical expenses for HSAs, Archer MSAs, and employer health FSAs/HRAs.
Who It Affects
State human services agencies that administer SSBG funds, diaper banks and other nonprofit eligible entities, child care and early‑learning providers, low‑income families with children under 4 and medically complex children, adults with incontinence, and HSA/FSA/MSA plan administrators and trustees.
Why It Matters
This is a targeted federal investment in a basic‑needs gap that can affect child health and child care participation; it creates new federal reporting and evaluation obligations and shifts some out‑of‑pocket hygiene spending from families to public programs and tax‑advantaged accounts, with implications for program administration, procurement, and supply chains.
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What This Bill Actually Does
The bill treats diaper assistance as a specified use of increased SSBG funding and provides both a recalculated SSBG ‘‘amount’’ for allocation purposes and a separate appropriation to finance a diaper assistance program for FY2026–2029. States receive increased funding but must allocate those funds to eligible entities (states, local governments, tribes, diaper banks, or qualifying nonprofits) to buy and distribute diapers, medically necessary diapers, diapering supplies, and adult incontinence products.
The statute requires that these federal funds supplement — not replace — state general revenues used for the same purposes and caps state administrative spending on these new dollars at 5 percent.
Eligible entities must use funds to carry out direct purchase and distribution activities, integrate diaper assistance with other basic‑needs and child health programs, and perform community outreach to increase participation. The statute enumerates a broad set of allowable integrations (TANF, Medicaid/CHIP, WIC, home visiting, child care programs, IDEA part C) so diaper distribution can be coordinated with existing family services.
States must ensure funds are expended within the fiscal year of receipt or the following fiscal year, and distributions are subject to program‑level reporting and evaluation requirements.Reporting obligations require states, in their annual SSBG reports, to provide counts of recipients by age group, number of families assisted, types and counts of diapers and supplies distributed (including categories of adult incontinence products), ZIP Codes of distribution, and distribution methods. HHS must reserve funds to contract with a national 501(c)(3) for technical assistance and to support an evaluation; the Department must complete an evaluation within two years of enactment and an updated evaluation within three years, both of which are to be reported to Congress and published.
The bill also defines key terms (eligible child: under 4 and in a low‑income family defined as self‑certified at ≤200% FPL; medically necessary diapers; adult incontinence materials) and exempts the program from sequestration under the Balanced Budget and Emergency Deficit Control Act.
The Five Things You Need to Know
The bill sets a deemed SSBG ‘‘amount’’ of $1.9 billion for FY2026–FY2029 while separately appropriating $200 million each year for diaper assistance activities.
States may use up to 5% of the additional funds for administration but must distribute the remainder to eligible entities and may not treat the federal funds as replacing state general revenue for the same purposes.
Eligible entities include diaper banks, nonprofit organizations with at least one year of relevant experience, Indian tribes/tribal organizations, and state or local governmental entities that demonstrate fiscal and reporting capacity.
States must report, for FY2026–FY2029, recipient counts by age, family counts, the number and types of diapers and incontinence supplies distributed, ZIP Code(s) of distribution, and distribution methods in their annual SSBG reports.
The tax code changes allow distributions from HSAs and Archer MSAs and reimbursements from FSAs/HRAs for medically necessary diapers and diapering supplies, with the rule applying to amounts paid or expenses incurred after December 31, 2025.
Section-by-Section Breakdown
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Funding increase and appropriations for diaper assistance
This subsection deems the SSBG ‘‘amount’’ used in statute to be $1.9 billion for each year FY2026–FY2029 and creates a separate appropriation of $200 million per year (FY2026–FY2029) to carry out the diaper assistance program. The Secretary is given explicit authority to reserve up to 2% of the annual appropriation to contract with a national nonprofit for technical assistance and up to $3 million in FY2026 for the required evaluation. Practically, the provision creates two budget levers: an altered baseline for SSBG allocation formulas and a discrete pot of funds HHS will oversee for diaper‑related activities.
Permitted uses, allocation rules, and administrative cap
States must distribute increases to eligible entities to purchase and distribute diapers, medically necessary diapers, and adult incontinence products, perform outreach, and integrate diaper assistance with other family supports. Funds are constrained by existing SSBG statutory limits and must supplement — not supplant — state spending. States may use no more than 5% of their additional allocation for administrative activities, including contracting, monitoring, and reporting, which places a practical ceiling on state overhead.
Reporting and evaluation requirements
States must include detailed distribution metrics in their annual SSBG reports for FY2026–FY2029: counts by age, families served, numbers and types of items distributed, ZIP Codes of distribution, and distribution methods. HHS must carry out an evaluation of program effectiveness, publish the results online, and update the evaluation within three years; those studies will examine health and developmental outcomes tied to unmet diaper need.
Guidance, definitions, and eligible entities
HHS must issue program guidance within 180 days of enactment to define eligible entities, allowable uses, and reporting. The statute provides detailed definitions — e.g., eligible child (under 4, ≤200% FPL self‑certified), medically necessary diaper (diagnosed medical condition for children 3+), adult incontinence materials (explicit list includes catheters, adult diapers, pads, wipes, and over‑the‑counter rash creams), and diaper bank criteria — which will shape who receives funds and what products qualify.
Sequestration exemption
The bill amends the Balanced Budget and Emergency Deficit Control Act to exempt this targeted diaper assistance funding from sequestration orders. That legal carve‑out intends to protect the program from automatic across‑the‑board cuts, reducing budget uncertainty for planned distributions and contracted evaluations.
Tax code changes to qualify medically necessary diapers and diapering supplies
This section amends sections of the Internal Revenue Code governing HSAs, Archer MSAs, and health FSAs/HRAs so that medically necessary diapers and diapering supplies are treated as qualified medical expenses. The bill sets a definition for medically necessary diapers tied to medical diagnoses and quality standards and phases the tax‑treatment changes in for amounts paid or expenses incurred after December 31, 2025. Employers and plan administrators will need to revise plan language, reimbursement policies, and participant communications.
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Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Low‑income families with infants and toddlers: The act directs federal money to cover diapers and supplies that families otherwise purchase out of pocket, reducing a recurring household expense that can impede access to child care and increase health risks like diaper dermatitis.
- Families of medically complex children: The statute authorizes funding for medically necessary diapers and supplies for older children (3+), addressing specialized product needs tied to chronic conditions and reducing out‑of‑pocket medical costs.
- Low‑income adults and adults with disabilities who use incontinence products: Explicit coverage of adult incontinence materials (diapers, catheters, bags, pads, wipes, rash creams) removes a frequent, often uncovered expense for adults relying on such items.
- Diaper banks and nonprofit distributors: Organizations that collect, warehouse, and distribute hygiene products are eligible recipients and can scale operations with federal support and technical assistance.
- Child care providers and early‑childhood programs: Broader availability of diapers may increase child care participation by removing a barrier to enrollment (many centers require parents to supply diapers).
Who Bears the Cost
- State agencies administering SSBG: States must design allocation processes, monitor grantees, compile the detailed reporting required, and absorb administrative burdens (capped at 5% but operationally meaningful).
- HHS and federal administrators: The Department must write guidance within 180 days, manage reservations for technical assistance and evaluation contracts, and publish evaluations — tasks requiring staff time and oversight.
- Eligible nonprofits and diaper banks: Although recipients gain funding, they must meet competency, fiscal accountability, data collection, and reporting requirements that may require upfront investment in systems and staffing.
- Tax‑advantaged account administrators and employers: Plan administrators, HR departments, and payroll vendors must update plan documents, claims adjudication rules, participant notices, and tax reporting to incorporate medically necessary diapers and supplies.
- Federal budget/taxpayers: The bill alters SSBG calculations and creates a $200 million‑per‑year appropriation for four years; those are additional federal outlays that will be borne by the Treasury.
Key Issues
The Core Tension
The central dilemma is whether scarce federal dollars should be used to meet an immediate, tangible material need (diapers and incontinence supplies) via a flexible, state‑administered block grant model — which maximizes local tailoring but risks uneven implementation — or whether the need should be addressed through a more uniform, entitlement‑style mechanism that ensures consistency but reduces state flexibility and raises long‑term federal costs. The bill chooses targeted SSBG funding plus tax‑advantaged coverage, solving for immediacy and flexibility while accepting potential variation in access and administrative complexity.
The bill establishes a focused federal funding stream for diapers while preserving significant state discretion through SSBG. That design trades the benefits of federal targeting (money earmarked for diapers) for the familiar fragmentation of block grant implementation: states will set eligibility and distribution mechanisms, which risks uneven access and differences in product standards and procurement across jurisdictions.
Self‑certification of income (≤200% FPL) simplifies enrollment but raises questions about program integrity and whether targeting will reach the highest‑need families.
Adding medically necessary diapers to HSA/FSA/MSA reimbursement lists clarifies tax treatment but creates administrative and entitlement interaction issues. For example, the statute defines medically necessary diapers with medical diagnoses and quality standards, but it does not specify whether a clinician’s statement or prescription is required for reimbursement, nor how this change will interface with Medicaid or state plans that may already cover certain supplies.
The evaluation mandate is useful but short: measuring health and developmental outcomes causally attributable to diaper provision is methodologically difficult in a two‑to‑three‑year window. Finally, a 5% administrative cap constrains state overhead, but states and small nonprofits may still need additional capacity building to meet reporting, procurement, and distribution standards — a gap the reserved technical assistance funds may only partially close.
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