Last Wednesday, the House Ways and Means health subcommittee reviewed expanding HSA-eligibility and increasing HSA contribution limits. Here are the details.
Proposed Expansion of HSAs – from HSA-eligible health plans (like HDHPs) to everyone, regardless of health plan is a direct response to increases in health costs.
Universal HSAs allow more individuals and families to save tax-free money for health expenses. This means more dedicated health savings. This would reduce health costs and out-of-pocket expenses when using tax-free funds, This creates dedicated funds for health costs in retirement. Effectively, having more money to save for health expenses only increases healthcare options and payment strategies.
Increasing HSA Contribution Maximum
Proposed Expansion of Contributions – In addition to discussing a universal HSA, the proposed expansion would also include raising the yearly HSA contribution maximum to $7,350.
To give you a reference point, 2019 HSA contribution limits are $3,500 for individuals and $7,000 for families.
This would mean more money that individuals and families can save each year for health expense. Please note, neither existing HSA regulations nor proposed HSA regulations limit HSA investment growth.
HSAs: What’s Next
Increasing HSA availability to more Americans increases the opportunity to save tax-free money for healthcare costs. HSAs won’t fix healthcare, but they can create dedicated savings to make it easier to save money for health costs for today and into retirement.
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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.