House Republican Plan Would Match HSA Contribution Limits with HDHP Out-of-Pocket Caps
In response to Obamacare, House Republicans revealed their proposed American Health Care Act on March 7, 2017, and the bill includes boons for health savings accounts (HSA).
Provided the bill meets House approval, it would still need to pass the Senate, which is currently entertaining alternative solutions, including a bill to create Roth (after-tax funding) HSAs.
Here’s a breakdown of HSA impacts included in the American Health Care Act:
- The bill would nearly double contribution limits beginning in 2018, to match maximum out-of-pocket expense caps in HSA-eligible high deductible health plans (HDHP).
- Catch-up contributions could be made by both HSA-eligible spouses who are age 55+, but into the same HSA. Currently, under the same circumstances, spouses must contribute to their own respective HSAs.
- Accountholders could reimburse qualified medical expenses from the 60 days prior to opening an HSA.
- Over-the-counter medications would become a qualified medical expense, even without a prescription.
Reacting to the proposed legislation, HealthSavings President Kirk Hoewisch said: “I applaud any measures that would strengthen HSAs and increase their flexibility.
“HSAs were meant to empower individuals to become better stewards of their healthcare dollars, and improve their healthcare-related choices and behaviors. Measures like those proposed in the American Health Care Act would make HSAs more attractive to a wider audience — ultimately giving them greater control over their healthcare spending, and providing them with a tax-favored tool to save for retirement healthcare expenses as well.”