HSAs

House Ways and Means Committee Boosting Use of Health Savings Accounts

On July 11 and July 12, the House Ways and Means Committee marked up and passed out of committee 11 bills that will expand the use and availability of Health Savings Accounts (HSAs) for all Americans.  The bills considered were:

• H.R. 6301, “To amend the Internal Revenue Code of 1986 to provide high deductible health plans with first dollar coverage flexibility”.
• H.R. 6317, “To amend the Internal Revenue Code of 1986 to provide that direct primary care service arrangements do not disqualify deductible health savings account contributions, and for other purposes.”
• H.R. 6305, “Bipartisan HSA Improvement Act of 2018”.
• H.R. 6312, “Personal Health Investment Today (PHIT) Act”.
• H.R. 6309, “To amend the Internal Revenue Code of 1986 to allow individuals entitled to Medicare Part A by reason of being over age 65 to contribute to health savings accounts”.
• H.R. 6199, “To amend the Internal Revenue Code of 1986 to include certain over-the-counter medical products as qualified medical expenses”.
• H.R. 6306, “To amend the Internal Revenue Code of 1986 to increase the contribution limitation for health savings accounts, and for other purposes”.
• H.R. 6313, “Responsible Additions and Increases to Sustain Employee Health Benefits Act of 2018”.
• H.R. 4616, “To amend the Patient Protection and Affordable Care Act to provide for a temporary moratorium on the employer mandate and to provide for a delay in the implementation of the excise tax on high cost employer-sponsored health coverage”.
• H.R. 6314, “Health Savings Act of 2018”.
• H.R. 6311, “To amend the Internal Revenue Code of 1986 and the Patient Protection and Affordable Care Act to modify the definition of qualified health plan for purposes of the health insurance premium tax credit and to allow individuals purchasing health insurance in the individual market to purchase a lower premium copper plan”.

Votes on amendments and the bills can be found here.

Health Savings Accounts operate like Individual Retirement Accounts in that consumers can contribute funds tax free that can set aside and build up over time.  HSAs allow people to pay for qualified medical expenses, such as doctor visits, x-rays, and pharmaceuticals tax free.

For 2018, an individual can contribute up to $3,450 for an individual and up to $6,900 for a family.  The HSA always accompanies a high deductible health plan (HDHP).  Generally, the deductible must be at least $1,350 for an individual and $2,700 per family.

HSAs have become very popular and give consumers purchasing power to shop around for healthcare services.  According to the national trade association, America’s Health Insurance Plans, HSAs have grown in popularity.  First introduced in 2004, they have grown from 3.2 million in 2006 to 20.2 million in 2016.