A: The rules regarding eligible HSA contribution limits and their deductibility are expected to continue as they have in the past. In reality, there are only a few changes that directly affect health savings accounts (HSAs) in the health care reform legislation:
1. HSAs can no longer be used for over-the-counter medications (which also applies to flexible spending accounts),
2. The penalty for non-eligible distributions from an HSA was increased from 10 percent to 20 percent.
3. Small group and individual plans will have a maximum deductible of $2,000 for individuals and $4,000 for families (while HSA minimum deductibles do fall under these limits, and therefore HSAs are allowable, current plans above these limits would need to be modified).
There are, however, several facets of the law that could have an impact on HSAs and are worth keeping an eye on, including:
• The definition of "preventive services" in both the law and HSA rules,
• Medical Loss Ratio requirements for insurance carriers,
• Insurance exchanges and actuarial value calculations.
A very good article regarding the impact of PPACA on HSAs can be found here.
Question submitted by Maureen
Editor's note: After a commenter pointed out an error in the above response, Rob Glus amended his answer. Here is his reply:
The commenter is correct in that I mistakenly lumped the individual plans in with the small-group market (under bullet No. 3). This was an excellent catch, and my apologies to the reader.
The proposed deductible limits of $2,000/$4,000 was only applicable to the small-group market. In recent guidance, HHS has actually offered some possible flexibility to that standard by allowing for deductibles to exceed those limits in situations where the plan may not reasonably reach the actuarial value target of a given level of coverage (for example, the Bronze tier at 60 percent actuarial value) without doing so.