ABA/ABIA HSA COUNCIL BACKS BILL TO ENHANCE HEALTH SAVINGS ACCOUNTS
WASHINGTON, Sept. 26—The HSA Council, a joint project of the American Bankers Association and the American Bankers Insurance Association, today expressed its support for legislation introduced by Rep. Eric Cantor and Rep. Paul Ryan that may increase the availability and attractiveness of Health Savings Accounts.
“The proposed legislation addresses a number of concerns that are critical to accelerating HSA adoption nationwide,” said Kevin McKechnie, staff director of ABA/ABIA HSA Council. “The ability to fully fund an HSA—no matter when an individual becomes eligible during the year—is one of the most important provisions of the legislation.”
The bill, expected to be marked up by the House Ways and Means Committee Wednesday, would make changes to the Internal Revenue Code that could make HSAs more attractive.
Specifically, the proposed legislation would:
- Allow conversions of Health Reimbursement Arrangements (HRAs) and Flexible Spending Accounts (FSA’s) to Health Savings Accounts;
- Raise contributions limits to match the qualifying high-deductible health plan’s out-of-pocket maximum rather than just the deductible;
- Provide for earlier indexing - March 1 instead of August 1 – so that the inflation adjusted deductible limits will be known well before the fall health plan open enrollment activity begins;
- Allow for full funding of an HSA regardless of when in a year an individual becomes eligible;
- Provide relief from the comparability rule for lower-paid employees; and
- Allow a one time IRA distribution to fund HSAs.
“Financial institutions administer more than 90 percent of all HSAs,” said E. Craig Keohan, chairman of the ABA/ABIA HSA Council and president of First Horizon Msaver Inc. “Small businesses and individuals that buy health insurance as they need it—instead of at the beginning of the year—will most benefit from this change.”
About the ABA/ABIA HSA Council
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