Let’s start with understanding a few of the major changes each bill would introduce. The first bill is H.R. 6199, Restoring Access to Medication and Modernizing Health Savings Account Act, which would allow any of the following to now be treated as qualified medical expenses for any tax-favored healthcare account:
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Gym memberships and specified (up to a limit of $500 a year for an individual and $1,000 a year for a joint return);
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Over-the-counter medications; and
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Feminine hygiene/menstrual care products.
The bill would also change the following provisions specifically with respect to HSAs:
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Allow enrollees in family coverage under a qualifying High Deductible Health Plan (HDHP) to contribute to an HSA, even if their spouse contributes to a medical FSA, which would make them ineligible under current law.
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Allow individuals with Direct Primary Care or Concierge-style primary care service memberships to still contribute to an HSA, as long as the monthly fee for such services is not more than $150 for individual coverage or $300 for family coverage.
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Would allow HSA-compatible HDHPs to provide first-dollar coverage (e., before the deductible has to be met) for up to $250 of non-preventive services per year for single coverage ($500 for family). This will allow HDHPs to cover telemedicine and at least limited treatment for chronic diseases without cost sharing by the member.
The second bill, H.R. 6311, Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Act, would do the following:
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H.R. 6311 would increase the maximum contribution to health savings accounts (to the amount of deductible and out-of-pocket limitation – $6,650 for an individual and $13,300 for a family in 2018). This would nearly double the contributions allowed currently.
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Allow both spouses to make catch-up contributions to the same health savings account. Under current law, if both spouses are HSA-eligible and age 55 or older, they must open separate HSA accounts for their respective “catch-up” contributions (an extra $1,000 annually).
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Would significantly increase the amount in a flexible spending account that can be carried over to the following plan year. The current maximum is $500. The proposed maximum is up to three times the annual FSA salary-reduction contribution limit (which is currently $2,650). The effect of this would be to essentially eliminate the use-it-or-lose-it feature, except on termination of employment.
The expansion of the HSA rules will only further the rise of High Deductible Health Plans. These HDHP plans may be a cost-effective alternative to the normal “copay” style plans. Many companies are offering a HDHP plan alongside a “copay” style plan to ensure their employees can take advantage of the additional tax savings while finding the right fit for each employee.
Is your company offering the most effective healthcare options? Are you taking full advantage of these potential HSA advantages? If not, please let Fall River know and we are happy to consult with your HR team to ensure you and your members are aware of all these new potential advantages.
