Tuesday, June 05, 2012
America’s Health Insurance Plans (AHIP) recently reported that Health Savings Account (HSA) enrollment is at 13.5 million, up 300% since 2007. This growth is happening across all segments – large corporations, small businesses and individuals – despite provisions in the healthcare reform laws that have limited the plans’ original intent.
Two new pieces of legislation are poised to give consumers back some of the benefits HSAs were meant to provide.
With the future of the individual mandate, and all that goes with it, in question, Congress is now trying to give consumers back some of the benefits HSAs were meant to provide.
This week, The House and Means Committee introduced two bills: H.R.5842 and H.R. 5858.
H.R. 5842. This bill would repeal the restriction that currently prohibits consumers from purchasing over-the-counter medications without a prescription. Passage would again give HSA and FSA account holders the ability to buy items such as Advil, Tums and cold medicines tax-free with money from their accounts. By eliminating the extra steps currently required to access these medications, the bill would make it easier for consumers to get these everyday health products when they need them.
H.R. 5858. Currently, if consumers are enrolled in a high deductible health plan before they open an HSA, the date the bank account was opened is used as the starting point from which claims can be paid. This bill would allow consumers to pay for claims retroactively back to the day coverage begins with the insurance plan.
It would also allow individuals and employees over age 55 – as well as their spouses when there’s family coverage – to make $1,000 catch-up contributions annually to their HSAs. Plus, the bill would enable veterans, who currently can’t enroll in HSAs if they receive care through the Department of Veteran Affairs, to be eligible for these plans.
Timing is Everything
The time may be right for these bills to pass. HSAs, available since 2005, have proved themselves acceptable alternatives to traditional health plans. Why?
Consumers are willing to exchange higher deductibles health plans for lower premiums.
HSAs offer a triple-tax advantage – tax-free contributions, interest and withdrawals – as long as the money is used for qualified medical expenses.
Consumers have autonomy over how to spend their healthcare dollars.
HSAs are portable and can stay with the consumer for life.
The theory behind HSAs is that consumers will be better educated and more engaged in their healthcare decisions. But when first introduced, consumers didn’t have all the cost information to be able to shop for the best care at the best price.
This year, following a push for more transparency, major insurance carriers like UnitedHealthcare, Cigna and Blue Cross Blue Shield have, or are in middle of, rolling out robust cost estimator technology to provide accurate and targeted pricing information on medical claims and pharmacy data. These carriers are also starting to identify high quality/high efficiency providers within their networks. Together, these efforts provide the needed information to give HSAs wider appeal.
HSAs are also gaining strength on the heels of increasing interest in wellness. Many employers who offer HSAs do so in conjunction with worksite wellness programs. And the pairing works well because both plans are designed to encourage consumers to be active in their healthcare decisions and to drive action through incentives.
How can you make sure Congress passes these bills? Take action. Contact your U.S. Representative and ask them to support these bills. The website of the nation’s premier advocacy group supporting HSAs, www.hsaalliance.org, enables you to email your Congressmen directly.
If enacted, both bills would go into effect for tax years following December 31, 2012 – much sooner than many of the provisions of the current healthcare reform law.
Amy Gallagher has over 19 years of healthcare industry experience. As Vice President at Cornerstone Group, she advises large employers on long-term cost-containment strategies, consumer-driven solutions and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, is a member of local organizations like the Rhode Island Business Group on Health, HRM-RI, SHRM, WELCOA, and the Rhode Island Business Healthcare Advisory Council, and participates in the Lieutenant Governor’s Health Benefits Exchange work group of the Health Care Reform Commission.