House Passes Bills- Includes HSA, FSA and HRA Improvements

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On July 19, 2018, the House Rules Committee released two HSA-related bills (Rules Committee Prints 115-82 and 115-83) that combined 10 of the 11 bills approved by the House Ways & Means Committee on July 12th.

On July 23, H.R.6199 Restoring Access to Medication and Modernizing Health Savings Accounts Act of 2018 and H.R.6311 Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Act of 2018 were approved 8-4 in a party line vote by the House Rules Committee. During the proceedings, 2 amendments were offered and both failed. Consequently, the two bills moved on to the House floor. On July 25th under a closed-rule process, the H.R.6199 vote passed with bipartisan support in a 277-142 (R: 231-1; D: 46-141) margin and the H.R.6311 vote passed with bipartisan support in a 242-176 (R:230-1; D: 12-175) margin. The bills will now move to the Senate for consideration later this year.

These two bills contain the following provisions that would enhance Health Savings Accounts (HSA), Health Care Flexible Spending Accounts (FSA) and Health Reimbursement Arrangements (HRAs):

  • Allowing reimbursement through an HSA, HRA, MSA, or Health Care FSA of approved over-the-counter drugs without a prescription.

  • Allowing reimbursement through an HSA, HRA, MSA, or Health Care FSA of approved menstrual care products (i.e. tampon, pad, liner, cup, sponge, or similar product used by women with respect to menstruation or other genital-tract secretions)  through those accounts.

  • Treating certain sports and fitness expenses as qualified medical expenses up to certain limits ($500 a year for an individual and $1,000 a year for a joint return).This includes amounts paid for membership at a fitness facility, participation or instruction in a program of physical exercise or physical activity, or safety equipment for use in a program of physical exercise or physical activity.

  • Allowing some first-dollar flexibility for coverage of specialized services in a HSA-compatible High Deductible Health Plan (Health plans can provide coverage for services before the deductible is met up to $250 a year for an individual and $500 a year for family coverage.).

  • Allowing on-site health clinics alongside an HSA without being considered disqualifying coverage as long as significant medical care is not provided. 

  • Allowing direct primary care arrangements (DPC) (monthly payment to provider) below the deductible and alongside an HSA without being considered disqualifying coverage. For this purpose, a DPC arrangement is one that the individual is provided primary care services by primary care practitioners and the sole compensation for such care is a fixed periodic fee that does not exceed an aggregate of $150 a month for an individual and $300 a month for a family. The monthly fees are treated as qualified medical expenses.

  • Allowing an individual to contribute to an HSA if the individual’s spouse has a Health Care FSA, but only if the spouse’s Health Care FSA cannot reimburse that individual’s medical expenses. 

  • Allowing Health Care FSA and HRA balances to fund an individual’s HSA under certain situations (transfers at the employer’s discretion would be capped at $2,650 for individuals and $5,300 for families. Any conversion taking place during the same year as the FSA or HRA contribution was made will count towards an HSA contribution for that taxable year). 

  • Increasing HSA contribution limits to the annual out-of-pocket limit for an HSA-qualified high deductible health plan (HDHP).  For 2018, annual out-of-pocket limits are $6,650 Single and $13,300 Family. For 2019, annual out-of-pocket limits will be $6,750 Single and $13,500 Family.

  • Allowing individuals who are enrolled in Medicare Part A to contribute to an HSA if they have a HSA qualified HDHP, as well as individuals who have bronze or catastrophic coverage without being considered catastrophic coverage. 

  • Allowing spousal catch-up contributions to the same HSA account for individuals over the age of 55, rather than separate accounts for each spouse.  

  • Allowing reimbursement from an HSA for medical expenses incurred prior to establishment of the HSA, as long as the person was enrolled in HDHP coverage and the HSA was established within 60 days of the effective date of HDHP coverage 

  • Increasing the Health Care FSA rollover maximum to 3x the annual maximum FSA contribution amount. 

  • Allowing all individuals purchasing health insurance in the Individual Market the option to purchase a lower premium Copper Plan.

 The 11th bill approved by the Ways & Means Committee (H.R.4616) mid-July, which would delay the Cadillac plan tax, was not included in the either approved bill.

 H.R.5963, a bill to delay the tax on health insurers (which was not considered by the Ways & Means Committee), was added to H.R.6311 by the House Rules Committee.

Note:  It is important to note that passage of these two bills by the House does not guarantee that these will become law nor does it guarantee that the provisions summarized in this post will make it into the final version of the bill(s). The Senate will need to approve or amend the 2 bills passed this week. If amended in the Senate it will need to go back to the House for another vote and if passed in the House it will still need to go to the President for signature, on any bill before it becomes law. If passed in the current form, the provisions in these bills would take effect for plan years beginning after December 31, 2018.

We, along with our advocacy group the Employer Council on Flexible Compensation (ECFC) will continue to monitor this activity and we will provide updates as any new information becomes available.

 

 

Categories: Benefits in General, Health Care Reform, Compliance, Health Care in General | Tags: HR 6311 , HR 6199 , HSA , FSA , HRA , House , Restoring Access to Medication and Modernizing Health Savings Accounts Act of 2018 , Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Act of 2018 | Return