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HSA Council: Regulatory Updates

Medicare/Medicaid | HSAs for Veterans | ABLE Accounts | HSAs in Private Exchanges | HSAs and the Cadillac Tax | Additional Regulatory Issues

FAQs

Q: How to Handle Employer Funds when HSA is Not Opened
HSA Council Executive Director answers the question: What should the bank do with HSA funds from an employer when the employee does not open the account? See the answer.

Medicare/Medicaid

Indian's Medicaid HSA program, HIP 2.0, serves as example of how HSAs can be included in Medicaid.

  • Indiana's HIP 2.0 Wins Approval by HHS.
    In January 2015, Indiana Gov. Pence announced that the administration has approved Healthy Indiana 2.0 that will require contributions from all able-bodied Hoosiers participating in the program. It also creates an Employer Benefit Link that provides a Medicaid contribution for recipients who are eligible and participating in employer-sponsored health insurance plans. In addition, recipients who do not make their required contributions toward their health benefits can be locked out of the program for six months.  All recipients will be required to make a contribution toward their Medicaid benefits, even those who are at the lowest income eligibility levels.
  • Indiana Gov. Pence Unveils HIP 2.0 Plan, Modeled on HSAs
    HIP 2.0 is a consumer-driven health care coverage program for low-income adults that builds on Indiana’s history of consumer-driven health care and would replace traditional Medicaid for all non-disabled adults. HIP 2.0 will be available for residents 19 to 64 with incomes up to 138 percent of the federal poverty level.
  • Indiana Governor Pence Discusses Medicaid HSA on Morning Joe Governor Pence describes the benefits and popularity of the Healthy Indiana Plan, which provides eligible individuals and families with an account to provide funding for medical services. Gov. Pence describes it as "essentially an HSA for Medicaid."

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HSAs for Veterans

In 2014 Congress passed legislation creating the “Veteran’s Choice Card,” a $10 billion, three-year program to allow veterans to go outside the VA system to get the care they need – if they have been on a waiting list longer than 30 days and/or live more than 40 miles from the nearest VA facility. The HSA Council is currently working with the VA on a pilot program where veterans who qualify for the Veteran’s Choice Card program can choose to receive their benefits in an HSA.

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ABLE Accounts

The HSA Council advocated for enactment of the Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 (ABLE Act), which President Obama signed into law on December 19, 2014. This act created tax-preferred savings accounts -- similar to an HSA -- that will allow disabled people and their families to save for their care without sacrificing eligibility for disability benefits. The legislation was modeled after Section 529 of the Internal Revenue Code, which authorizes the use of Qualified Tuition Programs for qualified higher education expenses, commonly referred to as 529 Plans.
 
Treasury is developing regulations to guide states on information required to open an ABLE account, the documentation needed to prove ABLE account eligibility, details of qualified disability expenses and tax reporting documentation. No accounts can be established until the regulations are drafted and public comments are considered, but it is appropriate for states to consider legislation authorizing creating ABLE accounts. States will need to pass laws authorizing a state agency to establish an ABLE program. Once authorized, the state agency will likely promulgate rules detailing how the ABLE program will operate.

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HSAs in Private Exchanges

Private Exchanges Drive Growth in HSA Market: HSA Consulting Services' White Paper, The Power of Choice: The Game-Changing Combination of Private Exchanges and Health Savings Accounts, predicts that "50 million Americans will be covered by HSA Qualified plans by 1/1/2019."  Learn more from HSA Consulting Services. 

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HSAs and the Cadillac Tax

The IRS released Notice 2015-16, which provides some insight into how the agency will interpret the statutory language imposing the Cadillac Tax on high-cost employer-sponsored plans. The IRS has said that the total dollars spent by an employer – premium and contributions to the HSA, even if those contributions are from the employee and merely facilitated by the employer – are counted towards the threshold for the excise tax. The HSA Council is examining options for a legislative fix to this treatment of HSA funds. 

  • HSA Must be Excluded from "Cadillac Tax", featuring HSA Council executive director, Kevin McKechnie, from Sputnik. April 7, 2015.
  • Healthcare Trends Institute Study:
    Nearly half (48.2%) of the survey respondents said they are somewhat to very concerned about the impending 2018 excise tax on high cost health plans under the ACA. In order to not be penalized, 30.4% of respondent companies indicated they are moving to a high deductible health plan.
  • United Benefit Advisors (UBA): 2014 Health Plan Survey
    UBA found that "In 2014, employees saw a 10 percent decrease in their average single Health Savings Account (HSA) employer contribution from the previous year, from $574 in 2013 to $515 in 2014. Average family contributions also decreased 7 percent during the same period, from $958 to $890." The survey results also "reveal a correlation between enrollment in HSAs and Consumer Driven Health Plans (CDHPs), linking higher HSA contributions to increased enrollment in the cost-saving plans."

 

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​Questions? Please contact Kevin McKechnie for more information.

 

 Indexed Amounts

 

2016 HSA indexed amounts:

  • Maximum Contribution is $3,350 (individual) and $6,750 (family)
  • Catchup contribution: $1,000 if age 55+
  • Minimum Deductible is $1,300 (individual) and $2,600 (family)
  • Maximum Out-of-Pocket is $6,550 (individual) and $13,100 (family)

2017 HSA indexed amounts:

  • Maximum Contribution is $3,400 (individual) and $6,750 (family)
  • Catchup contribution: $1,000 if age 55+
  • Minimum Deductible is $1,300 (individual) and $2,600 (family)
  • Maximum Out-of-Pocket is $6,550 (individual) and $13,100 (family)