On February 8, 2018, Senators John Thune, R-South Dakota, and Tom Carper, D-Delaware (S. 2410) and Representatives Diane Black, R-Tennessee, and Earl Blumenauer, D-Oregon (H.R. 4978), introduced the bipartisan bill, the Chronic Disease Management Act of 2018.
The bill, if passed into law, would expand the definition of a dependent to include adult children and domestic partners. Under current law, if an adult child is covered under his/her parents health plan or if an employee covers his/her domestic partner, the parent or employee cannot use their HSA dollars tax free for expenses associated with the adult child or domestic partner. The adult child or domestic partner must open their own HSA and deposit funds to receive tax free benefits for their expenses.
It also amends the IRS code to provide health savings account eligible high-deductible health plans the flexibility to cover services and drugs used to treat chronic diseases before meeting the plan deductible, which promotes valued based insurance design, which is an effective tool to improve the quality and reduce the cost of care for Americans with chronic diseases, with improved outcomes via increased medication adherence, reduced complications, and decreased emergency department visits.
The safe harbor definition of chronic care proposed in S. 2410 would include the following:
“A plan shall not fail to be treated as a high deductible health plan by reason of failing to have a deductible for care and prescription medications related to the treatment of medically complex chronic conditions which—
- are substantially disabling or life threatening,
- have a high risk of hospitalization or other significant adverse health outcomes, and
- require specialized delivery systems across domains of care.’’
Changes of this nature would likely make Health Savings Accounts (HSA) more attractive to consumers. We will continue to monitor any activity with this bill and report updates as available.