Companion bills introduced in the U.S. Senate and House are designed to give health savings accounts (HSAs) and flexible spending accounts (FSAs) a boost.
The Health Savings Act of 2017 (S. 403) was introduced Feb. 15 in the Senate by Finance Committee Chairman Orrin Hatch (R-Utah) and Sen. Marco Rubio (R-Fla.). A companion bill (H.R. 35) was introduced in the House on Jan. 3 by Rep. Michael Burgess, M.D. (R-Texas), Chairman of the House Energy and Commerce Committee’s Subcommittee on Health.
The legislation is designed to simplify and expand HSAs and FSAs, health care accounts that provide Americans opportunities to save for medical costs through tax-deductible contributions. According to the bill’s sponsors, it addresses some of the questions and concerns that have been raised since HSAs were first enacted in 2003 but were not addressed by the HOPE Act of 2006. The legislation would:
- double the current HSA limits;
- extend bankruptcy protections to HSAs identical to that afforded IRAs;
- allow married individuals with HSA accounts to double their catch-up contribution to account for their eligible spouses (current law allows HSA-eligible individuals age 55 or older to make additional catch-up contributions each year, but the contributions must be deposited into separate HSA accounts even if both spouses are eligible to make catch-up contributions);
- allow Medicare beneficiaries enrolled only in Part A to continue to contribute to their HSA accounts after turning 65 if they are otherwise eligible to contribute to an HSA; and
- permit distributions for prescription and over-the-counter medicines and drugs.