HSA Options for U.S. Senate Finance Committee Health Reform Bill Revealed
The United State Senate Committee on Finance, the main player in the Health Care Reform effort yesterday revealed its options with regard to changes to the current Health Savings Account laws, and their document, titled “Description of Policy Options Financing Comprehensive Health Care Reform: Proposed Health System Savings and Revenue Options,” makes the following proposal:
Under this policy option, HSA contributions could be limited to the lesser of the individual’s deductible under the high deductible health plan or the dollar amount of the maximum allowable aggregate HSA contributions. The additional tax on distributions from an HSA that are not used for qualified medical expenses would be increased to 20 percent. Distributions from an HSA would only be excludible from gross income as an amount used for qualified medical expenses if the expenses are substantiated by the employer or an independent third party. If a limit were placed on the current exclusion for employer-provided health coverage, HSA contributions could be counted against the limit.
Prior to any comment on the specific policy options proposed, it is politically relevant that the word Options was used twice in the title of this document, and in the title of the section above.
Having said that, it is clear that we will be working hard to increase the number of options in the U.S. Senate Finance Committee mark-up, to include a Medicare or Medicaid HSA and an HSA option for whatever final choices are presented.
The substantiation provisions are anathema to the HSA Coalition and the HSA industry, except for those who repeatly express their desire to build their revenue on the backs of HSA account holders with increased monthly fees. The precedent of having to ask permission to get paid back your money that you own is unbelievably intrusive into the entire concept of owning your money and spending it the way you see fit.
The HSA Coaltion will be working towards the goals of creating an option for HSAs in whatever the final product is, and to remove the options listed above.