Could HSAs be getting a Make-Over?

Could HSAs be getting a make-overIf you have ever been enrolled in a high deductible health plan (HDHP) with a health savings account (HSA), you certainly know there are many rules to follow. Congress is working on two bills that may significantly change those rules to make these accounts more manageable. If either of the two bills are passed, the interest in these types of accounts could skyrocket.

The Employee Benefit Research Institute reported that HSA enrollment estimates were up to 21.4 million participants. Yet some experts had seen a slowing of the enrollment. The reports also highlights another trend, i.e. the majority of people remain in these plans for less than four years. This seems contrary to the primary goal of these accounts as they were designed to help Americans put money aside to assist with medical cost in later years.

Here are some quick highlights of the proposed bills:

Eligible expenses would include the purchasing of over-the-counter medications with a health savings account (HSA), flexible savings account (FSA), or a health reimbursement account (HRA) without requiring a prescription. Certain sports and fitness expenses, including gym memberships, would qualify as medical expenses up to a limit of $500 a year for an individual.

  • HSA contributions limits would be raised to align with out-of-pocket limits of the Patient Protection Affordable Care Act. Working seniors participating in Medicare Part A and covered by a qualified HDHP would be able to contribute to an HSA. Individuals would no longer be barred from contributing to an HSA if his/her spouse is enrolled in a general purpose FSA.
  • At an employer’s discretion, FSA and HRA balances could be transferred over to HSA accounts, capped at $2,650 for individuals and $5,300 for families. FSA balances could be carried over to the following plan year. However, this rollover cannot not exceed three times the annual FSA contribution limit.
  • First dollar coverage may be permitted to provide coverage for and incentivize the use of primary care visits and telehealth services. Employees would be able to access employer sponsored on-site or retail clinics without disqualifying an HDHP enrollee from contributing to an HSA, as long as significant medical care is not provided.
  • HSAs opened within 60 days after gaining coverage under a HDHP will be allowed to operate as if they had been opened on the same days as the HDHP. This would permit reimbursement of an expense prior to the establishment of the HSA.

These relaxed rules could certainly add some peace of mind to the many Americans wanting to take the proper steps in saving for the future yet make it easier and simpler to manage these accounts. Contact us today if you have questions about hose recent changes.