Congress Moves on HSA Expansion

SIMPSONVILLE, South Carolina, July 27 -- The Self Insurance Institute of America issued the following news:

Earlier this week, the U.S. House of Representatives approved several measures to expand the availability and use of health savings accounts (HSA), along with relief measures on several long-term taxes implemented by the Affordable Care Act (ACA). The Self-Insurance Institute of America, Inc. (SIIA) has been actively advocating for various changes and the elimination of impending onerous tax policies. While the two pieces of legislation (HR 6199 / HR 6311) would make a number of improvements to HSAs and similar arrangements, and must still be considered by the Senate, highlights include:

* HSA Contribution Limit Increase: HSA contribution would be raised to $6,650 for individuals and $13,300 for families.

* Health FSA Carry-Over: FSA balances could be carried over to the following plan year, not to exceed three times the annual FSA contribution limit

* Fitness/Health Expense Coverage: Certain sports and fitness expenses, such as the cost of gym memberships, would be treated as qualified medical expenses up to a limit of $500 per year for individuals and $1,000 joint.

* HDHP with HSA Transfer: Employer may allow employees with an FSA or HRA that enroll in a qualifying High-Deductible Health Plan (HDHP) with an HSA to transfer balances (capped at $2,650 for individuals and $5,300 for families).

* First Dollar Coverage Flexibility for HDHPs: Health plans can provide coverage for services before the deductible is met up to $250 a year for an individual and $500 a year for family coverage. This would allow insurers to incentivize services that may reduce health care costs, such as primary care visits and telehealth services.

* Direct Primary Care: Allow HSA use for Direct Primary Care Service Arrangements and allow fees to be treated as qualified medical expenses ($150/ mo. individual or $300/mo. family).

* Medical Clinic Coverage: Allows employers to offer free or discounted services at on-site or retail medical clinics without disqualifying an HDHP enrollee from contributing to an HSA so long as significant medical care benefits are not provided.

* HSA Catch-Up Contributions: Allow Spouses 55 and older to Make Catch-Up Contributions to the Same Health Savings Account (an extra $1,000 annually).

Along with significant changes to HSAs, legislation was also passed to eliminate the medical device tax. While debate has been ongoing in Congress over further delaying and eliminating the Health Insurance Tax (HIT) and Cadillac Tax, further actions in the House and Senate may occur on those issues as soon as September. Among additional policy ideas being floated is a 3-year retroactive relief of the employer mandate. SIIA, along with health coalition partners, continues to advocate for such actions and remains hopeful that the House and Senate will act on the HSA changes, as well as the needed ACA tax relief.