Provisions in the end-of-session bill passed by Congress provide a number of elements intended to stimulate the use of health savings accounts.
HSA provisions added to the Tax Relief and Health Care Act are intended to make the plans more attractive as saving vehicles and mesh the accounts with growing popularity in high-deductible consumer-directed healthcare plans.
The rules give employees a one-time opportunity to roll over unused funds from an existing flexible spending account or health reimbursement arrangement to an HSA. It also allows a one-time transfer from an individual retirement account to an HSA.
The bill also expands annual limits on HSA contributions, allowing individuals with HSA-qualified policies that have deductibles below the annual contribution limits - $2,700 for self-only coverage and $5,450 for family coverage - to contribute funds up to these amounts each year.
Finally, the bill gives additional flexibility for employers to help lower-paid workers, enabling them to make additional contributions to HSAs for them.
HSA proponents were quick to laud the changes.
"HSAs have helped many Americans find affordable health insurance for the first time," said Tim Morales, president of the HSA Clearing Corp. in Lake Geneva, Wis. "These provisions are simple common-sense improvements to HSAs that will help more Americans take advantage of the benefits that HSAs offer."
The increase in savings limits to pay for current and future medical expenses is the biggest benefit of the bill, said James A. Klein, president of the American Benefits Council. Eliminating the rule restricting annual contributions to the amount of the deductible for the high-deductible health plan will enable people to save money in advance of future years' expenses.
Industry watchdogs say they're concerned that the HSA provisions were included with little debate or attention, as a result of extensive last-minute lobbying efforts from corporate organizations representing employers and financial organizations. Critics say employers stand to benefit by pushing more responsibility for healthcare costs to employees; financial organizations are expected to benefit by holding the HSA funds and offering consumers investment vehicles for the funds.
"This will bring financial institutions deeper into HSAs," said Shawn Jenkins, president and CEO of BenefitFocus.com, a Charleston, S.C.-based company offering software and services for benefit enrollment, electronic billing and data exchange.
"Congress sees the rapid adoption of health savings accounts is starting to take hold," he said. "Now, 6 percent to 7 percent of the population has one, and the legislation will make it cheaper for larger volumes of people to manage their healthcare."