W^H? The Holmes Murphy Blog

  • HSA Enhancement Likely Victim of Political Division

    The U.S. House of Representatives has been busy recently passing some bills that could possibly impact you and dramatically improve the flexibility of Health Savings Accounts (HSAs). There are a lot of moving parts with these bills, but here’s what we know. The new bills would allow:

    • Up to $250 per individual and $500 per family of services, such as telehealth and primary care visits (without being subject to the deductible)
    • Reimbursement for Direct Primary Care Services
    • Employers to provide free or discounted services at onsite or retail medical clinics without disqualifying a High Deductible Health Plan (HDHP) enrollee
    • The conversion of Flexible Spending Accounts (FSAs) and Health Reimbursement Accounts (HRAs) into an HSA account

    Additionally:

    • Over-the-counter medications would again be reimbursable from an HSA.
    • Fitness and exercise equipment would be reimbursable up to $500 individual/$1000 joint return.
    • Working seniors enrolled in Medicare Part A could contribute to an HSA if they’re covered by an HDHP.
    • The annual contribution limits would be raised to match the annual out-of-pocket maximums, which would be $6,650 individual/$13,300 family for 2018.
    • Plans deemed to be Bronze or Catastrophic would be qualifying plans for HSA purposes.
    • The bills would eliminate the current rule, which prevents a spouse from having an FSA.
    • These enhancements would eliminate many of barriers associated with the use of HSAs.

    Now the big question is, “Will this pass the Senate?” At this point, there isn’t a clear answer.

    The cost estimate for these enhancements could be almost $40 billion over the next 10 years. With this price tag, it’s unlikely that budget conservative Senators will support these changes. In addition, the Democrats are eyeing the upcoming elections and hoping to capitalize on the popularity of Obamacare and the efforts made by the administration and Republicans to dismantle it piece by piece. Several Democrats are continuing the call for “Medicare for All” as the solution to the national healthcare crisis. However, Seema Verma, the Medicare and Medicaid lead, recently spoke out against Medicare for All with an interesting tact. Her position is that a Medicare for All program would divert resources and attention away from the aging population which Medicare is designed to protect. She also said she would likely not approve any state waivers for such an initiative.

    As we approach the November elections, it’s unlikely we’ll see a Republic Senate pass a bill with such a high price tag and even more unlikely to see a Bi-partisan effort to pass such a bill.

    We’ll keep our eye on this and let you know of any updates as we get them! In the meantime, if you have any questions or thoughts, feel free to comment below or reach out to me directly!

    Published on: 08.02.18

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