Page 12 - Investment Advisor - November 2023

Beginnings

WASHINGToN WATCH

By Melanie Waddell

House Panel oKs Legislation raising HsA

Contribution Limits

The bill would also allow spouses to make catch-up contributions to the same
HSA and let individuals keep their own HSAs even if their spouses are enrolled

in flexible spending arrangements.

he House Ways and Means HSA even if their spouse is enrolled in
Committee passed in late a flexible spending arrangement (FSA).
TSeptember two pieces of legisla- • Ensure employees, at the employ-
tion that would expand health savings er’s discretion, may convert their FSA
accounts, including raising HSA contri- and health reimbursement arrangement
bution limits and allowing workers over (HRA) balances into an HSA contribu-
65 who are enrolled in Medicare Part A tion upon enrolling in a high-deductible
to make contributions. health plan with an HSA. The conver-
The Bipartisan HSA Improvement sion amount is capped at the annual
Act of 2023, H.R. 5688, and the HSA FSA contribution limit for an individual
Modernization Act of 2023, H.R. 5687, ($3,050 in 2023) and double that for
passed out of committee on Sept. 28. family coverage.
The HSA Modernization Act, • Clarify that HSA funds can be used
introduced by Rep. Beth Van Duyne, for direct primary care, an arrangement
R-Texas, would increase the HSA allowed to contribute to an HSA if they are in which patients pay monthly fees
contribution limit to the sum of the not enrolled in Medicare,” ABC said. directly to a care provider.
annual deductible and out-of-pock- The group explained that it supports “Many of the solutions included in
et expenses permitted under the legislation “that would allow employees these bills reflect basic common sense
high-deductible health plans to which to continue to contribute to their HSAs like ending the marriage penalty that
HSAs are tied. until they retire, even though they are currently bars married couples from
In 2023, that sum is $7,500 for self- automatically enrolled in Medicare Part combining their HSA contributions
only coverage and $15,000 for fam- A at age 65.” into a single account, ensuring eligibil-
ily coverage. Under current law, the The bill would also allow HSA ity of direct primary care arrangements
2023 HSA contribution limits are funds to cover health care services that and worksite clinics, and allowing folks
$3,850 for self-only coverage and $7,750 occurred up to 60 days prior to the to save an amount that will actually
for families, with a $1,000 annual catch- establishment of the account and allow cover what they might owe in out-
up contribution allowed for those 55 both spouses to make catch-up contri- of-pocket expenses,” Ways and Means
and older. butions to the same HSA. Committee Chairman Jason Smith,
The American Benefits Council The Bipartisan HSA Improvement R-Mo., said in a statement.
applauded the bill for allowing employees Act, introduced by Rep. Lloyd Smucker, With 78% of health savings accounts
65 and older to contribute to an HSA.Under R-Pa., would: owned by taxpayers making less than Adobe Stock
current law, “active employees are only • Allow an individual to maintain an $100,000, Smith said, “HSAs are clearly

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