Bipartisan legislation has been introduced in the House of Representatives that would make it easier for families to save for health care costs.
Introduced Sept. 27 by Reps. Jennifer Wexton (D-VA), Earl Blumenauer (D-OR) and Mike Kelly (R-PA), the Health Savings for Families Act of 2019 (H.R. 4576) would give families the ability to utilize the tax advantages of both a health savings account (HSA) and a health flexible spending account (FSA).
Currently, when a couple is on two different health care plans and one spouse utilizes a health FSA, the other spouse generally would be precluded – except for limited circumstances – from contributing to an HSA and otherwise would be subject to a tax penalty if he or she did so. H.R. 4576 would eliminate this penalty, allowing families to contribute up to $7,000 to an HSA to help pay for qualified medical expenses (for 2019, $7,000 is the maximum contribution a family can make to an HSA). The tax penalty would not apply as long as the health FSA does not reimburse the expenses of the spouse paying into the HSA.
Wexton explains that it is becoming more common for working spouses to be covered under two different health care plans and more employers are restricting spousal coverage if the spouse has access to insurance through their own employer. As such, families would like to have more flexible options that allow them to save on their health care costs, such as employer-provided health FSAs or by contributing to an HSA. “Instead of penalizing families for responsibly managing their money – as the existing law does – my bill allows couples to save and spend in the way that’s easiest and most affordable for them,” Wexton said in introducing the legislation.
H.R. 4576 was referred to the House Ways & Means Committee, on which both Blumenauer and Kelly serve.
