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Health Savings Accounts are Here to Stay

3 min read

30 sec brief

Are you worried about the future of your healthcare coverage? The talk surrounding the repeal and replacement of the Affordable Care Act (ACA or also referred to as Obamacare) has many people concerned. How does it affect your own coverage?

Are you worried about the future of your healthcare coverage? The talk surrounding the repeal and replacement of the Affordable Care Act (ACA or also referred to as Obamacare) has many people concerned. How does it affect your own coverage?

Health Savings Accounts Regulations

Throughout all the proposed plans, one theme remains consistent. Health Saving Accounts (HSAs) appear to be here to stay. In fact, some proposed plans look to enhance HSA regulations.

Replacement Proposals

ACA repeal and replacement plans have had no shortage of ideas. On February 16, 2017, House Republican leaders released an outline of their GOP health plan and on March 6, 2017, they introduced the American Healthcare Act. It follows other proposed plans, which representatives previously released.

  • Obamacare Replacement Act (Senator Rand Paul’s proposal) — introduced January 24, 2017
  • Patient Freedom Act (Senator Bill Cassidy’s proposal) — introduced January 23, 2017
  • A Better Way: Our Vision for a More Confident America (House Speaker Paul Ryan’s proposal) — introduced June 22, 2016
  • Empowering Patients First Act (Representative Tome Price’s proposal) — introduced May 13, 2015

For more details, Kaiser Family Foundation offers an interactive comparison of the above plans to the ACA.

Proposed Health Savings Accounts (HSAs) Changes

Each of the proposals addresses the HSA role in its replacement plan. The following are a few examples of proposed changes to Health Savings Accounts (HSAs).

  • Allow individuals enrolled in any kind of health coverage to make tax-deductible contributions to an HSA (think Medicare or VA benefits)
  • Eliminate high-deductible health plan (HDHP) enrollment requirement to make tax-free contributions to an HSA
  • Expand qualified covered expenses to include items such as over-the-counter medicine and health insurance premiums
  • Authorize new Roth HSAs in which contributions are not tax deductible, but interest and investment income are tax-free, as well as distributions for qualified medical expenses
  • Encourage HSA participation with one-time refundable tax credit of $1,000
  • Increase annual tax-free contributions limits to the annual out of pocket maximums
  • Allow spouses to make contributions to HSAs

What does this mean to you? No matter what healthcare coverage looks like in the future, HSAs are an integral component of the coverage. You can start saving today and Invest in your health®.

Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.

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