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6 HSA Expansion Recommendations From The Recent Healthcare Reform Report

6 HSA Expansion Recommendations From The Recent Healthcare Reform Report


Recently, the Department of Health and Human Services, the Department of Labor, and the Department of the Treasury released a combined report titled “Reforming America’s Healthcare System Through Choice and Competition.” The 119-page report was produced following an executive order from President Trump and took over a year to create.

The report identified four areas where federal and state regulations hinder choice and competition, including (1) health care workforce and labor markets, (2) health care provider markets, (3) health care insurance markets, and (4) consumer-driven health care. Here are six recommendations the report makes for improving the consumer-driven health care landscape by expanding the scope and use of HSAs:

1. Allow more insurance plans to be HSA-qualified. Currently, high deductible health plans must meet certain IRS requirements to be HSA-qualified. The report recommends allowing any plan with an actuarial value (the percentage of total average costs covered by the plan) below 70% to be HSA-qualified.

2. Raising HSA contribution limits. The report doesn’t give an actual number here, but there is legislation currently in the Senate that proposes to raise HSA contribution limits to that year’s annual out-of-pocket maximum. This would almost double the current HSA contribution limit.

3. Allowing Medicare enrollees to contribute to HSAs. Currently, once someone enrolls in Medicare, they aren’t eligible to open or contribute to an HSA. The report recommends permitting Medicare enrollees who are covered under HSA-qualified health plans to continue contributing to their HSAs.

4. Expanding ability to pay for health insurance premiums with HSA funds. Currently, health insurance premiums can only be paid with HSA funds in limited, specific circumstances. The report recommends allowing HSA accountholders to pay for all HSA-qualified non-group premiums using HSA dollars.

5. Allowing fixed-fee arrangements for HSA accountholders. Currently, coverage under provider-consumer fixed-fee arrangements disqualifies participants from opening or contributing to HSAs. The report recommends allowing participants under these arrangements (including direct primary-care arrangements) to also be eligible for HSAs.

6. Greater access to treatment for chronic conditions. The report recommends giving HSA-qualified plans greater ability to cover low-cost preventive treatment for chronic conditions, increasing the services HSA-qualified plans are allowed to cover.

The report also pitched the idea of allowing people enrolled in Healthcare Sharing Ministries (as defined in section 5000A(d)(2)(B)(ii) of the tax code) to be eligible for HSAs, provided they met two conditions. Currently, those programs are counted as disqualifying coverage in regards to HSAs.

Download the full report here, and be sure to check back with us for updates on whether these HSA recommendations are taken into effect.


At HealthSavings, we are 100% in favor of measures to strengthen HSAs and increase their flexibility. By expanding HSAs’ scope and use, more people will acquire control over their healthcare spending and gain access to a supremely tax-advantaged savings vehicle for retirement medical expenses.

Author: James Denison


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