New Health Savings Account Legislation Moving Through Congress

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New Health Savings Account Legislation Moving Through Congress

May 31, 2012

Posted by Kristin Oberlander - The NASE recently learned of two new bills that would help individuals who use Health Savings Accounts (HSAs). The two bills are H.R. 5842, "Restoring Access to Medications Act" and H.R. 5858, a bill to improve HSAs. HSAs are tax-preferred accounts which can be utilized with high deductible health plans (HDHP), the typical health insurance plan for America’s smallest businesses - the self-employed.

The Restoring Access to Medications Act, H.R. 5842, would repeal the disqualification of over-the-counter medications for use with an HSA or a health flexible spending arrangement (FSA). Current law prohibits over-the-counter medication purchase with these savings instruments.

H.R. 5858 expands usage and affordability for individuals who use an HSA in connection with an HDHP. Many self-employed business owners opt to use an HDHP because the premiums are generally lower than traditional health plans. 
Here are some of the highlights of H.R. 5858:
  • Saver’s Credit: Contributions to an HSA would generate the same amount of credits as current law allows for contributions to IRAs or 401(k)s.
  • 60 day grace period: Medical expenses incurred between the time an individual enrolls in an HDHP and establishes an HSA (for up to sixty days) would be reimbursed using HSA funds.
  • Spouses may make catch-up contributions to the same HSA:  Both spouses (if eligible) could make catch-up contributions to their HSA. They may also transfer the amount into one HSA account if they choose to do so.
The NASE supports these two bills because access to reasonably priced, quality health care for the self-employed and micro-businesses is a  top priority for the association. For more information on HSAs, visit NASE’s Health Resource Center and the Department of Treasury’s Resource Center.
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