House passes two HSA bills

The House passed two HSA bills on July 25: (1) the Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Bill of 2018, H.R. 6311, and (2) the Restoring Access to Medication and Modernizing Health Savings Account Bill, H.R. 6199.

H.R. 6311 would, among other things, delay the annual fee for health insurance providers through 2021 and increase access to catastrophic “copper” plans as well as allow coverage to be used with HSAs.

H.R. 6199 would, among other things, expand access to HSAs, and allow certain over-the-counter products to be considered qualified medical expenses. Additionally, the measure would allow HSA funds to be used for certain gym memberships and exercise equipment.

H.R. 6199

Over-the counter drugs. Under the bill, amounts paid from HSAs and MSAs that are qualified medical expenses would no longer be limited only to those medicines and drugs which are prescribed, and include amounts paid for menstrual care products, such as tampons, pads, liners, cups, sponges, or similar products used by women with respect to menstruation or other genital-tract secretions. Similarly, the proposal amends the definition of qualified medical expense for health FSAs and HRAs. Qualified medical expenses would no longer be limited only to those medicines and drugs which are prescribed, and include expenses incurred for menstrual care products. The provision for amendments to amounts paid from HSAs and MSAs would be effective for amounts paid after December 31, 2018. The provision for amendments to health FSAs and HRAs would be effective for expenses incurred after December 31, 2018.

H.R. 6311

Application of credit to additional coverage. Qualified health plans generally must meet certain requirements. Under the proposal, the premium assistance credit would be available with respect to catastrophic plans that meet the requirements relating to qualified health plans. The premium assistance credit would also be available with respect to health plans that meet the requirements relating to qualified health plans except that they are not offered through an Exchange. Thus, an individual who purchases a qualified health plan in the individual market, but not through an Exchange, may be eligible for the premium assistance credit if the requirements for eligibility are otherwise met.

However, advance premium assistance payments would not be available with respect to a qualified health plan that is not purchased through an Exchange. An individual who purchases such a plan must claim the premium assistance credit on his or her income tax return. Under present law, any person that provides minimum essential coverage to an individual during a calendar year must report certain information to the IRS. The proposal would require additional information reporting for minimum essential coverage provided to an individual that is not enrolled through an Exchange. As under present law, the credit will not be available with respect to grandfathered plans or plans that receive similar treatment under administrative guidance. In addition, the proposal specifies that the credit is not available with respect to grandmothered plans. Under the proposal, a grandmothered health plan is defined to be health insurance coverage which is offered in the individual health insurance market as of October 1, 2013, and is permitted to be offered in such market after January 1, 2014, as a result of the Center for Consumer Information and Insurance Oversight (CCIIO).

Ineligibility of qualified health plans covering abortion. In addition, the premium assistance credit is not be available with respect to a qualified health plan that provides coverage for abortions for which federal funds may not be used. However, nothing in the proposal prohibits an individual from purchasing, or a health insurance issuer from offering separate coverage for abortions, or a health plan that includes abortions, as long as no premium assistance credit is allowed with respect to the premiums for such coverage and premiums are not paid for with any amount attributable to the premium assistance credit (or the amount of any advance payment of the credit). The modifications to the premium assistance credit would generally be effective for taxable years beginning after December 31, 2018. The proposal specifying that advance premium assistance payments are not available with respect to a qualified health plan that is not purchased through an Exchange would be effective on January 1, 2019. The proposal amending the present-law reporting requirements under Code Sec. 6055 would be effective for coverage provided for months beginning after December 31, 2018.

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