The 7 Ways Your HSA May Be Getting Even Better
Health savings accounts (HSAs) are a great value. Full stop. And today, a number of legislative bills weaving through Congress will make HSAs even more attractive. Here’s seven of ’em.
From more than doubling the amount of contributions individuals can put into their health savings accounts (HSAs), to allowing contributions for certain sports and fitness purchases(!), to expanding HSA eligibility to faith-based cost-sharing plans, the list of means by which HSAs are becoming even more useful in 2020 seems to go on forever! But let’s break down exactly how things are shaking out.
Here are seven Congressional proposals that would greatly enhance the benefits of everyone’s favorite tax-advantaged savings vehicle!
1. The Health Savings Account Expansion Act of 2019
Authored by Representative Mike Gallagher (R-WI-8), this bill would increase the contribution limits for HSAs. The current limit of $3,550 is for an individual, and $7,100 for a family. The bill suggests limits raise to $9,000 and $18,000, respectively (on Jan. 1, the limits are set to increase to $3,550 for self-only and $7,100 for family coverage, per the IRS).
The legislation would also allow HSA funds to be used for health insurance premiums, over-the-counter medications, and direct primary care.
2. The Personal Health Investment Today Act of 2019
Authored by Senators John Thune (R-S.D.) and Chris Murphy (D-Conn.), this bill would incentivize healthier living by allowing individuals to use a portion of the money saved in their HSA toward qualified sports and fitness purchases, like gym memberships, fitness equipment, and youth sports league fees.
3. The Faith in Health Savings Accounts Act of 2019
Authored by Representative Mike Kelly (R-PA), this bill would enable members of health care-sharing ministries to be eligible to establish HSAs. Memberships in faith-based cost-sharing health plans would be treated under the tax code as coverage under a high deductible health plan, for the purposes of tax deductions.
4. The Veterans Health Savings Account Act
Authored by Paul Gosar (R-AZ), this bill would allow veterans to make uninterrupted contributions to HSAs and receive medical benefits through the Department of Veterans Affairs.
5. The Chronic Disease Management Act of 2019
Authored by Representative Earl Blumenauer (D-OR), this bill would allow high deductible health plans required for an HSA to provide treatment for chronic diseases with no deductible. Sen. Thune authored a sister bill.
6. The Health Savings Act for Seniors
Authored by Representatives Ami Bera, M.D. (D-CA) and Jason Smith (R-MO), this bill would allow seniors covered under Medicare to continue using or create new HSAs.
7. The Tax Fairness for the Self-Employed Act of 2019
Authored by Representative Antonio Delgado (D-NY), this bill would allow the deduction for health insurance costs in computing self-employment taxes.
So, What Happens Now?
Collectively, these bills would enable more people to save for medical expenses in our beloved tax-advantaged HSAs, expand the types of expenditures allowed and increase how much money people can put into their accounts.
Be sure to check back in the new year for new legislative updates, and to keep learning about all the great ways HSAs can keep making a much-welcomed impact on your financial and personal wellbeing!