What's Missing from the House-Passed Bill? More HSA Expansion Provisions.

By William G. Stuart | Originally posted by Health Savings Academy

The large tax bill that passed the House of Representatives last month expands and enhances the Health Savings Account opportunity for many Americans. It does not address all the enhancements that the industry and patient advocacy groups have championed during the past decade.

The Senate Finance Committee is now responsible for marking up the Health Savings Account provisions in the One Big, Beautiful Bill Act. This comprehensive tax bill includes many important Health Savings Account provisions, including:

  • Enrollment in Medicare Part A is not disqualifying.

  • Bronze and catastrophic plans are defined as HSA-qualified coverage.

  • A spouse's participation in her employer's general Health FSA does not disqualify the otherwise-HSA-eligible spouse.

  • Patients in a direct-primary care arrangement are not disqualified and can withdraw Health Savings Account funds tax-free to pay their monthly DPC fees.

  • Onsite clinics are not disqualifying if they limit full coverage below the deductible to select preventive and certain routine care.

  • HSA-eligible individuals without a Health Savings Account can deposit their catch-up contribution (for individuals age 55 and older) into a spouse's account.

  • Lower-income account owners can contribute up to double the statutory contribution limits.

  • Employers are permitted to roll over employees' unused Health FSA or HRA balances to seed a new Health Savings Account.

  • Certain fitness expenses, including health-club fees, are a qualified expense (up to annual limits).

  • Individuals whose Health Savings Accounts are not established on the date that their HSA-qualified plan is effective can establish their accounts retroactively up to 60 days.

See the last HSA Wednesday Wisdom column here for more details on these provisions.

Telehealth Coverage below the Deductible

During the Covid-19 pandemic, Congress three times passed legislation permitting insurers and employers to cover virtual medical visits below the deductible (no patient cost sharing). This provision was vital early in the pandemic, when physician offices were closed or open to only the sickest patients, for whom the health risk of contracting this unknown virus was less than the injury, illness, or condition that required treatment.

Congress has not renewed the treatment of telemedicine visits below the deductible. All plans that renew in 2025 must apply non-preventive virtual visits to the deductible. This shift certainly affects patient financial responsibility. However, it's important to note that patients can still enjoy the efficiency (lower cost) and convenience (no travel) of telehealth visits. They now must pay a market price for these services.

Not everyone supported the temporary measures. Some people were concerned that covering telemedicine visits below the deductible favored one form of visits (virtual) over another (in-person). The two are now on par in terms of patients' being responsible for the price of the service before they satisfy the deductible. Many virtual visits, particularly through telemedicine companies that don't invest in offices and other medical staff, have a lower allowable charge. Thus, patients who choose virtual care can still reap a price advantage - just not as great as when the price was zero.

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