House Committee OKs HSA Reform Measures
In a 24-14 vote, the House Ways and Means Committee
approved H.R. 6134, a measure that would allow employers to
contribute $2,700 for single coverage and $5,450 for family
coverage, with those amounts being adjusted for inflation,
according to Business Insurance. This would change
the current law, in which the maximum contribution
level is the lesser of the deductible in the
high-deductible plan to which the HSA is linked, or $2,700
for single coverage and $5,450 for family coverage.
HSAs are a type of consumer-driven health plan (CDHP) meant
to increase employees’ participation in their medical
care decisions by getting them to share in the cost burden
of coverage. The thought behind this increasingly popular
health care trend is that if people are paying for their
own health care and shopping around for the best prices, it
will lead to a gradual decline in the cost of health care
(See
Study: Employers See CDHPs as Course to
Lower Health Costs
).
The bill would also allow employers and employees to make
the maximum permitted contribution to an HSA regardless of
when in the year an employee became covered under the
arrangement, Business Insurance reported. Instead of
prorating contributions, employees can join a company
late in the year and still contribute the maximum amount to
their HSAs.
Additionally, the bill would give employees a one-time
opportunity to make tax-free rollovers of unused flexible
spending account and health reimbursement arrangement
balances to their HSAs. The rollover would have to be
completed by the end of 2011. The legislation would allow
for a one-time opportunity to roll over individual
retirement account (IRA) balances into HSAs, giving workers
the opportunity to withdraw the transferred funds tax-free
to pay for health expenses.