Health Spending Accounts (HSAs) HSAs are steadily becoming more popular among working Americans of nearly all ages. A recent report showed that High Deductible Health Plans (HDHPs) with HSAs saw a boost in enrollment from 4.2% to 18.9% from 2007 through 2017 for adults aged 18-64 with employment-based coverage.
With the growth of HSAs in the past decade, reform is inevitable. The landscape of health insurance is constantly changing, and with that comes additional bills to adjust HSAs to be the most beneficial.
There are currently two House bills: H.R 6199 and H.R 6311—both of which could increase the range of health-related items that an HSA can be used for, therefore making HDHPs and HSAs more appealing. But what exactly is the potential impact of these latest HSA reform proposals?
The Potential Impacts
H.R 6199
H.R. 6199, or the Restoring Access to Medication and Modernizing Health Savings Accounts Act, could have numerous crucial impacts on employees with HSAs.
Firstly, it will allow accounts to pay for certain over-the-counter medical products—including menstrual products—that previously were not considered to be qualified expenses. The act would also eliminate the current requirement that an individual needs to obtain a prescription to use HSA funds to pay for over-the-counter medications. It also states that $500 in spending per individual, or $1,000 per family, for certain fitness expenses (such as exercise programs and gym memberships) would be treated as amounts paid for medical care.
Additionally, the new act would allow an HSA holder to join a Direct Primary Care (DPC) program and use HSA funds to pay the memberships fees. Currently, participating in a DPC program disqualifies an individual from contributing to an HSA.
This is especially important because DPC programs are growing in popularity. The arrangement involves primary care practices charging patients a monthly, quarterly, or annual retainer, rather than billing them for each service separately.
H.R 6311
H.R. 6311, or the Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Act of 2018, is a little more straightforward. This act is intended to do exactly what its name implies: raise HSA contribution levels to match the annual limit on out-of-pocket and deductible expenses.
Both of these proposed bills have the potential to make HSAs more attractive to a wider range of people. But the bills have a long way to go—they have to make it through the Senate, which could take months, especially because the midterm elections are fast approaching.
As a broker, it’s crucial to monitor the paths of H.R. 6199 and H.R. 6311. That way, you can adjust your materials and educate clients thoroughly before any regulations are implemented and begin to impact their plans. The bills are intended to make HSAs a more desirable health insurance option. If one or both bill passes, it will be a great selling point for you moving forward and could potentially improve your clients’ employee’s quality of life for years to come.
If the Rules Stay the Same
It’s important to consider the possibility that neither bill gets passed, and what that could mean for you and your clients. HSAs will still provide an excellent solution for eligible high-income clients and their employees. In 2018, individuals under qualified health plans could contribute—before taxes—up to $3,450 for an individual or $6,900 for a family. Those funds are freely accessible to cover unexpected medical needs or can be saved and accumulated for years to cover medical expenses after retirement.
Your clients should be aware of potential changes in HSA regulations, so they can prepare their company for the impacts they could have. However, as a broker, it’s crucial that you provide only the most important and relevant information, to avoid confusing or inundating clients. Visit our website to learn more about HSAs and Clarity Benefit Solutions’ solution, Ready For Life HSA.
Sources:
1. https://www.benefitspro.com/2018/10/10/hoping-for-hsa-reform-412-71702/
2. https://www.benefitspro.com/2018/08/10/enrollment-in-hdhps-on-the-rise-traditional-plan-e/
3. https://www.congress.gov/bill/115th-congress/house-bill/6311
4. https://www.congress.gov/bill/115th-congress/house-bill/6199
