HSAs Become More Flexible

hsaCurrently, patients with high deductible health plans and health savings accounts have to pay for treatment of chronic illnesses out-of-pocket until they have reached their required deductible. According to IRS Notice 2019-45, those with chronic conditions such as diabetes, high blood pressure or asthma, will reduce their financial burden prior to reaching their health plan deductible.

The notice, which becomes effective on January 1, 2020, states that the service or item needed must be low cost and supported by medical evidence showing that it will prevent the chronic condition from getting worse or causing other related health issues.

IRS Increases HSA Limits

hsa-limitEmployees will be able to save some additional healthcare dollars in 2020 as the IRS will increase the limit on deductible contributions to an HSA by $50 for individuals and $100 for families. The limits will be $3,550 for individuals with self-only coverage and $7,100 for family coverage. The minimum deductible for a qualifying high deductible health plan will also increase, rising to $1,400 for single coverage and $2,800 for family coverage

Research shows that the number of HSAs increased by 13% over the past year, topping 25 million accounts with an anticipated increase to 30 million by 2020. Another important statistic revealed that the average employer contribution to HSAs rose from just over $600 in 2017 to $839 in 2018 – an increase of some 39%. Supporters are encouraging legislators to make HSAs even more consumer friendly by allowing adults over 65 to continue using an HSA to save for healthcare costs in retirement. We will continue to report on these efforts going forward.

How Reconciliation Can Change ACA

ACAWhile it will take support from Republicans and Democrats to fully replace Obamacare, a simple majority of Republican senators could repeal parts of the law through reconciliation. Here are just a few:

  • The individual and employer mandates can be reduced to zero
  • The Cadillac tax, currently delayed to 2020, could be repealed
  • Individual subsidies to purchase exchange coverage can be reduced to zero

Another welcome step requiring only a simple majority in the Senate would be increasing the limits on FSA and HSA contributions.

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