3 Policy Changes to Increase HSA Access

2. Expand the conditions under which HSAs and FSAs can be used

According to a January 2017 survey by Bankrate, 57% of Americans don't have enough cash to cover an unexpected $500 expense. HSAs and FSAs can help families manage their health costs and decrease the financial burden that results from both expected and unexpected expenses. A bill called the Health Savings Act aims to make HSAs and FSAs more accessible by implementing policy changes around the use of these accounts, including:

• allowing spouses who are both 55 or older to make catch-up contributions to the same HSA;
• allowing individuals who receive primary care services in exchange for a fixed periodic fee or payment, or who receive health care benefits from an onsite medical clinic of an employer, to participate in an HSA;
• including amounts paid for prescription and over-the-counter medicines or drugs as "qualified medical expenses" for which distributions from an HSA or other tax-preferred savings accounts (such as an FSA) may be used;
• increasing the limits on HSA contributions to match the sum of the annual deductible and out-of-pocket expenses permitted under a high-deductible health plan; and
• allowing HSA distributions to be used to purchase health insurance coverage.

The Health Savings Act (S. 403 /H.R. 1175) was introduced in February 2017 and is currently in committee in the Senate and the House.

3. Support and Enhance FSAs

HSA-qualified health insurance may not be available to or optimal for all Americans, in which case an FSA can be an attractive alternative. In contrast to the HSA, the entire annual FSA contribution amount is available to an employee on day one of the plan year, offering an immediate safety net against out-of-pocket health care expenses for families with with limited disposable income.

The Responsible Additions and Increases to Sustain Employee Health Benefits Act of 2017 would make FSA benefits more accessible to American families by increasing the annual limit on employee salary reduction contributions to $5,000, with an additional $500 for each additional employee (as adjusted for inflation after 2017). The Act also includes a carry-forward provision that allows employees to carry unused funds into the next year. The bill, H.R.1204, was introduced in February 2017 and is currently in committee in the House of Representatives.

With Americans increasingly bearing the financial burden of rising health care costs, consumer-driven spending accounts accessible via employee benefit plans play an important role in helping millions of Americans pay for health care. If implemented, the above policy changes will help extend the reach of these benefits at a time when more and more families depend on them.

Anne Richter is president of Accresa and chief strategy officer at Ameriflex. She began her career with UMB Bank in Kansas City, Missouri, working on corporate communications strategy, internal communications and marketing. Anne later worked as Vice President of Marketing for First Horizon Msaver in Overland Park, Kansas, a division of First Tennessee Bank, where she was charged with developing the bank's health savings account product line. In her current role, Anne oversees Accresa's business development and partnership strategy, while supporting and ensuring strategic alignment across broader Ameriflex growth initiatives.