ABA/ABIA HSA COUNCIL APPLAUDS PASSAGE OF IMPORTANT HEALTH

SAVINGS ACCOUNT FIXES

WASHINGTON, Dec. 11—The HSA Council, a joint project of the American Bankers Association and the American Bankers Insurance Association, today applauded Congress’ passage of legislation that will increase the availability and attractiveness of health savings accounts.

“These technical fixes address a number of concerns that are critical to accelerating HSA adoption nationwide,” said Kevin McKechnie, staff director of ABA/ABIA HSA Council. “One of the most important changes is the ability to fully fund a health savings account, no matter when an individual becomes eligible during the year.”

The legislation, passed this weekend as part of a broader tax bill, makes changes to the tax code that could make HSAs more attractive.  Specifically, the legislation:

• Allows conversions of health reimbursement arrangements and flexible spending accounts to health savings accounts;
• Raises contributions limits to match the qualifying high-deductible health plan’s out-of-pocket maximum, rather than just the deductible;
• Provides for earlier indexing - March 1 instead of Aug. 1 – so that the inflation adjusted deductible limits will be known well before the fall health plan open enrollment activity begins;
• Allows for full funding of an HSA regardless of when in a year an individual becomes eligible;
• Allows employer contribution to HSAs to be greater for lower compensated employees; and
• Allows a one time individual retirement account distribution to fund HSAs.

About the ABA/ABIA HSA Council

The HSA Council is a joint project of the American Bankers Association and its insurance affiliate, the American Bankers Insurance Association. Its members are banks and their insurance and technology advisors dedicated to improving American healthcare by improving the distribution of HSAs through banks.

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