House Passes Bill Enhancing HSA's

H.R. 6311, renamed the Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Act and passed 242-176, would allow the ACA's premium tax credit for low and moderate earners to be applied when buying lower-premium, "catastrophic" copper plans; let people over age 30 buy copper plans; and allow copper and bronze-level individual and small-group market plans to qualify for HSA contributions. The bill also would make these modifications to tax-advantaged accounts:

• Raise HSA contributions to $6,650 for individuals and $13,300 for families, which is the combined annual limit on out-of-pocket and deductible expenses under an HSA-qualified insurance plan in 2018. Currently, for 2018, HSA contribution limits are $3,450 for individuals and $6,900 for those covered under family medical plans.

• Permit HSAs to pay for qualified medical expenses as of the start of HDHP coverage if the accounts are opened within 60 days after coverage under a HDHP begins.

• Allow working seniors participating in Medicare Part A and covered by a qualifying HDHP to contribute to an HSA.

• Permit spouses over the age of 55 to make an annual catch-up contribution (an extra $1,000) to an HSA that's linked to a health plan providing family coverage. Currently, only the account holder can make an annual catch-up contribution.

• At an employer's discretion, allow employees with an FSA or a health reimbursement arrangement (HRA) who enroll in a qualifying high-deductible health plan with an HSA to transfer balances from their FSA or HRA to the HSA. Transfers would be capped at $2,650 for individuals and $5,300 for families.

• Permit health FSA balances to be carried over to the following plan year. This rollover could not exceed three times the annual FSA contribution limit.

Excerpt from SHRM Article Dated 7-27-18 by Stephen Miller, CEBS

MD Contraceptive Equity Act and its Impact on 2018 High Deductible Health Plans (HSA)

In 2016, Maryland passed the Contraceptive Equity Act, which requires health care insurers to:

• Provide coverage for a single dispensing of up to a six-month supply for covered, FDA-    approved, prescription contraceptives and devices (after a two-month trial). 
• Provide coverage for over-the-counter emergency contraceptives without a prescription
• Expand access to male sterilization benefits with no out-of-pocket costs. 

The IRS requires that high deductible health plans (HDHP) not cover benefits until the deductible for that year is satisfied. As you know, under current IRS rules for HDHPs, only preventive care benefits can be provided without a deductible. Preventive care includes a variety of screenings and services for adults and children. Food and Drug Administration-approved contraceptive methods, sterilization procedures, and patient education and counseling, as prescribed by a health care provider for women with reproductive capacity also must be covered without a copayment or coinsurance before the deductible is met. Male sterilization is not included in the IRS’ list of preventive services. 

The new Maryland law, effective January 1, 2018, creates a conflict with the IRS rules regarding the treatment of male sterilization as a preventive service. This new law impacts HSA plans sold in Maryland. Members who fund HSA's may be subject to tax penalties when they file their 2018 taxes – regardless of whether they use the covered benefit (male sterilization) or not. Subscribers and members with Grandfathered plans are not impacted. 

The Maryland Insurance Administration is aware of this issue and has asked the IRS for clarification as to whether or not they consider male sterilization to be a preventive benefit for the purposes of IRS regulatory guidance. In the meantime, members who fund an HSA with these plans may be subject to tax penalties if the IRS does not recognize male sterilization as a preventive care benefit. Members can continue to use their previously-funded HSA account to pay for health care services and should consult with a tax professional if they have further questions. 

Excerpt from Carefirst Blue Cross Bliue Shield of Maryland, 12-5-2017