Health Savings Account Blog

1. Give Individuals That Purchase HSAs On Their Own The Same Tax Advantages As Those With Employer-Sponsored Insurance. Currently, companies that purchase group coverage for their employee's are allowed to write off that expense on their taxes. But individuals are not. The President proposes making premiums for HSA-compatible insurance policies deductible from income taxes when purchased by individuals outside of work. In addition, an income tax credit would offset payroll taxes paid on premiums paid for their Health Savings Account insurance policies.

2. Eliminate All Taxes On Out-Of-Pocket Spending Through HSAs. This would allow people with HSA plans to make contributions to their account to cover all out of pocket expenses, not just their deductible. This proposal would in effect raise the contribution limit.

3. Enable Portable HSA Insurance Policies. This would enable employers to offer their employees a portable HSA insurance policy. Currently, the only way to do that is for the employees to have individual coverage instead of a group plan. Portability would allow someone to change jobs without worrying about losing their health insurance.

4. Extend The Benefits Of HSAs To Low-Income Families And Individuals Through Refundable Tax Credits. A family of four making $25,000 or less would be able to get a refundable tax credit of $3,000 from the Federal government to help buy an HSA-compatible policy that covers them for major medical expenses.

5. Allow Employers To Make Higher Contributions To The HSAs Of Chronically Ill Employees. Under current law, employers must contribute the same amount to each employee's HSA. This proposal would help chronically ill people pay for their expenses with pre-tax dollars.

These suggestions, though modest, would continue to push consumer-driven healthcare into the mainstream. The key ingredient then to really making it all happen is price transparency. We will cover price transparency in greater detail in future posts.