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Future of HSA's Under New New Healthcare Rules
For the most part the pro- and anti- HSA forces in Washington, DC remain unchanged after the election. Given that the partisan gridlock that defined much of the past 2 years hasn't budged, I thought it might be timely to address what is likely to happen next with HSA plans under te Affordable Care Act.
The future of HSAs is bright, but there are some challenges. The Affordable Care Act (ACA) should bring 20 to 30 million new consumers into the marketplace - most of whom will be seeking the most affordable plan they can purchase. Given the cost-effective value of HSA-qualified health plans, HSA plans stand to benefit significantly from what should be a wave of HSA plan adoption.
Even now, 2012 has been a record growth year for HSA plans. HSA custodians are generally reporting record enrollment for the 2013 plan year. Many expect similar results for 2014 as employer groups large and small position themselves for the full legal implementation of the ACA on January 1, 2014.
On November 20, 2012 the U.S. Department of Health and Human Services (HHS) proposed regulations to several components of the Affordable Care Act, including some specifically addressing Actuarial Value (AV) rules. The new rules are highly complex so we'd like to outline a couple of the key points as they relate to HDHPs and HSAs, both of which we find to be highly favorable for the future of HSAs.
- First, HHS has clearly indicated a portion of HSA contributions made during the year will be counted in the calculation of Actuarial Value.
- Additionally, HHS has included incremental medical expenses to the AV calculator to account for individuals with pre-existing conditions, as well as the pent up demand that many public exchange participants are likely to have.
The net effect of these important clarifications is the qualification of HSA plans as meeting or exceeding the Bronze level (60%) actuarial value requirement defined by the ACA. Based on this new guidance, an individual high deductible health care plan could have an annual deductible of $6250 with HSA contributions of $250 per plan year and still qualify as a bronze plan. HSA contributions could even push this same high deductible into Silver or Gold tiers.
This is great news for the millions of Americans seeking affordable health care coverage, the ability to choose their own healthcare provider and save tax-free dollars for future medical expenses.
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