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HSA Headlines - 12/28/18 - The biggest health savings stories of 2018
What a crazy year it's been in the world of consumer healthcare! Health savings accounts (HSAs) posted another year of strong enrollment growth, and it seems that more people are discovering just how helpful these accounts can be for their healthcare needs and to plan for retirement.
With so many stories to choose from, avid readers are probably waiting with bated breath for our favorites. So without further ado, here are the three HSA Headlines that really caught our eye this year.
House of Representatives passes two HSA expansion bills
By far the biggest story regarding HSAs in 2018 had to do with their potential expansion, which passed the House of Representatives in late July. The bills, H.R. 6199 and H.R. 6311, feature a number of consumer-friendly provisions, such as doubling the existing HSA contribution limits, treating menstrual care products as qualified medical products, opening up fitness products and gym memberships for purchase with HSA funds and a lot more.
But with a new House of Representatives being seated on January 3, 2019, and very little chance that these bills will be taken up by the Senate by then, they will have to be reintroduced in the next Congress all over again.
But these bills were still significant. They illustrate the prevailing thinking of consumer healthcare industry professionals and there's a good chance that some of these consumer-friendly provisions could form the basis of new legislation in the future. And we'll definitely cover it in this column.
HSA-eligible Apple Watches?
The release of the Apple Watch Series 4, which contains a series of health and wellness functions including a functioning echocardiogram (EKG), posed a unique question for the IRS who decides what products will be eligible for FSA and HSA spending.
Products that can be purchased with tax-free healthcare funds must be to "diagnose, cure, mitigate, treat, or prevent a disease," so a working EKG would seem to pass muster, right?
The answer is, not yet. But wearable health products are becoming increasingly versatile and many companies are opting to include products like fitness trackers in their employee wellness programs, so it may only be a matter of time before Congress will have to at least consider this change to open up these products to millions of HSA users.
HSA contribution limits rise, then fall, then rise again
In early April, we covered the surprising news that HSA family contribution limits would be reduced for 2018 as a result of the GOP tax bill being passed through Congress. Because of a change in how the IRS calculates inflation, HSA contribution limits initially dropped by $50. This change came far enough into 2018 that those who set aside the full contribution for 2018 found themselves scrambling to try to avoid tax penalties.
Thankfully, in late April, the IRS announced Revenue Procedure 2018-27, which stated that for 2018, taxpayers may treat $6,900 (rather than $6,850) as the maximum annual family HSA contribution.
After all that hubbub, we received news in mid-2018 about the expansion of HSA contribution limits even further. For those enrolling in an HSA in 2019, they'll now be able to contribute up to $3,500 on an individual level, and $7,000 for families.
And don't forget, if you're over age 55, you can contribute an additional $1,000 per year to an HSA. When you reach Medicare eligibility at 65, you can withdraw these funds for non-medical purposes with no tax penalty (it is just taxed as income).
2019 is gearing up to be an even bigger year for HSA users, and we'll be here to cover it.
HSA Headlines is a weekly roundup of the latest, most relevant news and conversations about your health savings. It appears every Friday, exclusively on the HSA Learning Center. And for more about your physical and financial well-being, be sure to follow us on Facebook and Twitter.