New Legislation to Strengthen and Expand HSAs and FSAs

Last week, Sen. Orrin Hatch (R-Utah) introduced the Family and Retirement Health Investment Act of 2011 that would modify and streamline rules for both HSAs and FSAs. Companion legislation was introduced in the House by Rep. Erik Paulsen (R-Minnesota) to improve health care through expanded HSAs.

Support is needed, as Hatch's bill specifically includes the following provisions:

Catch-up Contributions
Allows the spouse of an HSA account holder to double their catch-up contribution to account for their eligible spouse.

Contributions for Medicare Part A Eligible
Allows seniors enrolled in Medicare Part A only to continue contributing to their HSAs.

FSA Rollover
Permits up to $500 of unused FSA funds to carry forward to the following year.

Transition to HSAs
To ease transition to HSAs, clarifies current law to provide employers greater opportunity to roll-over funds from employees' FSAs or HRAs to HSAs.

Removes OTC Restrictions
Repeals restrictions on use of HSA/FSA/HRA dollars for the purchase of over-the-counter medications without a prescription.

Purchase of Health Insurance from HSA
Allows purchase of COBRA coverage, long-term care insurance, and HSA-qualified policies from an HSA.

Medicaid Health Opportunity Accounts
Provides states with the flexibility to create Health Opportunity Accounts for their Medicaid population.

Lifts Limits on Deductibles for Employer-Sponsored Plans in the Small Group Market
Repeals the recently enacted deductible limits of $2,000 for single coverage and $4,000 for family coverage for plans sold to small employers.

Expanded Definition of Qualified Medical Expenses
Modifies the definition of "qualified medical expenses" to promote wellness, and encourage exercise and better diet, by allowing HSA and FSA dollars to be used for gym memberships and meal replacement products.

Click here to read S. 1098 (Hatch).
Click here to read H.R. 2010 (Paulsen).

Act Now!

We urge you to act immediately! Please contact your legislators in Washington, and ask them to actively endorse these bills. We also encourage you to send a letter to your representatives and urge them to sign on immediately.

To locate contact information for your members of the House of Representatives, click here.
To locate contact information for your Senators, click here.

Also, you can visit savemyflexplan.org for more information.