Health savings accounts are making headlines yet again as Congress continues to try and expand health savings accounts (HSAs). The House is spearheading this effort by passing two bills on July 25 outlining proposed changes to HSAs, tackling the underutilization and hopeful expansions of these consumer-directed healthcare accounts.
With all of these big changes in the works, it's time to take a closer look at how your account structure could change in the near future.
3 things employers need to know about Congress' effort to expand HSAs - Tracy Watts, Employee Benefit News
If these bills manage to pass the Senate and are signed into law, before account holders even begin to navigate the new regulations, employers have plenty on their plates. First, with HSA contribution limits slated to double if the bills are passed, this will require new enrollment, payroll and other back end system changes that could be time-consuming, but worth the effort.
(Of course it's worth it -- nothing this good comes easy, you know.)
While it's not as simple as adding a new product to our Eligibility List, one of the provisions in this round of HSA bills allows for up to $250 (individual)/$500 (family) for non-preventive services (think: chronic care expenses) before HDHP holders pay down their deductibles.
Our biggest question? If these bills pass in the coming weeks and months, would they go into effect on January 1st, 2019, or could they be delayed until 2020?
Will Increasing Maximum HSA Limits Help Employees? - Rebecca Moore, Plan Adviser
A key perk of HSA reform is the doubling of yearly HSA contribution limits - $3,450 to $6,550 for individuals, and $6,900 to $13,300 for families. Additionally, account holders 55 and older, regardless of their health coverage, can contribute an additional $1,000 per year until they reach Medicare eligibility at 65. Good news!
If this reform passes, users would have considerably more reason to contribute to their HSAs. But will they? Employee Benefit Research Institute (EBRI) data from 2016 found that only 13% of HSA users contribute the maximum amount annually, so higher contribution limits may not have much of an effect on the population.
With 78% of the country living paycheck to paycheck most HSA users don't have the extraneous income to take full advantage of an HSA's retirement benefits. HSAs have become more versatile, but at this point, are people aware they can boost their retirement funds with their health savings? We certainly hope so, since these proposed limit boosts would change the HSA landscape for the better.
No matter what happens, be sure to follow the HSA Learning Center to stay on top of any changes that could affect your tax-free healthcare account!
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.