House Votes to Expand Health Savings Accounts
On July 25, the U.S. House of Representatives passed two bills (H.R. 6199 and H.R. 6311) that would expand how health savings accounts (HSAs) and other tax-preferred accounts can be used on health care spending. HSAs, which are paired with high deductible health plans, allow people to contribute pre-tax earnings each year and save for medical expenses.
The first bill—H.R. 6199, which passed 277 to 142—would allow individuals with HSA-eligible high-deductible health plans to use up to $250 a year (or $500 a year for families) on services like primary care and telehealth before they reach their deductibles. This bill also includes a provision that would count over-the-counter medications, menstrual products and certain sports and fitness expenses as qualified medical expenses.
H.R. 6199 would allow employers to provide free or discounted on-site or retail clinic care without disqualifying employees with high deductible health plans from setting up HSAs. It would also no longer disqualify individuals with direct primary care service arrangements.
The second bill—H.R. 6311, which passed 242-17—would nearly double how much an individual or family can contribute annually to an HSA. It would also expand who is eligible to set up an HSA, including working seniors enrolled in Medicare Part A who also have HSA-eligible high deductible health plans. Individuals with bronze or catastrophic level would also qualify for an HSA.
H.R. 6311 also would allow anyone—not just people under 30—to purchase catastrophic health coverage. It would combine the risk pool for those catastrophic plans with the rest of the plans sold in the individual market. The bill would also allow flexible spending account balances to be carried over.
The bill would also suspend the Affordable Care Act’s tax on health plans through 2021.
Both bills passed with some democratic support, though democrats largely argued that the bills would add to the budget deficit and would only help those who are “better off” and can afford HSAs. Senate Republicans said they don’t have any plans to vote on an expansion of health savings accounts this year.