To make good on promises to address the health insurance market by increasing choice and lowering cost, the House has taken some major steps this week.
Following a flurry of bills addressing the opioid crisis this spring, from both House and Senate, the House now moves to other strategies to accomplish this task. The House is targeting certain Affordable Care Act (ACA) taxes and health savings accounts (HSAs) to begin addressing choice and cost concerns.
The June/July introduction of a number of bills creates incremental changes to improve and expand the rules and benefits of HSAs along with the long-time desire to eliminate some of ACA’s specific healthcare taxes.
The ACA imposes a 2.3% sales tax on medical device supplies, such as pacemakers, dental instruments, artificial joints, surgical gloves, etc. This tax went into effect in 2010 and is estimated to bring in approximately $29 billion over the next ten years. Although it is one of the methods for funding the costs associated with the ACA, many in opposition to the tax feel that it stifles medical innovation and ultimately increases costs to the consumers.
HSAs continue to gain in popularity since their introduction in 2004. Two components make up a HSA: a high deductible health plan (HDHP) and a tax-preferred bank account. Unique rules exist for each one. While premium costs are usually lower for these plans due to the higher level of cost-sharing by the participant, many of the rules for use pose challenges for participants and diminish their attractiveness.
The following are some examples of the provisions, challenges posed and expected results:
|Must not be enrolled in any other group health plan||Common benefits solutions like flexible spending accounts (FSAs), health reimbursement arrangements (HRAs), onsite clinics, direct primary care plans, telemedicine plans, etc. are other health plans||Participants with access to these other health plans are not eligible to contribute the HSA bank account|
|May only pair the tax-preferred bank account with a qualified HDHP||Employees or other individuals may not have access to an HDHP or may desire to self-fund more expense with a plan that covers only catastrophic-type expenses||Loss of tax-preferred method to fund an individual’s out-of-pocket expense|
|HDHP may not reimburse any claims expenses, other than preventative care, before the deductible is met||Deductibles are higher than the out-of-pocket expense the participant is able, or willing, to pay before receiving reimbursement from the HDHP plan||Fewer people enroll in these plans because they don’t feel they have the ability to weather all the pre-deductible expenses.|
|There are separate statutory limits for the HDHP and the bank account contributions||The limits for the HDHP and bank account are based on separate and different calculations so participants may not be able to contribute their full annual deductible and out-of-pocket into their bank account||Bank accounts are insufficient to meet the out-of-pocket expenses for those with more expensive treatment needs|
|No contributions allowable for Medicare enrollees||No further contributions once entitled to, i.e., enrolled in, Medicare||Inability to continue to enjoy tax-preferred treatment to save for medical expenses|
The House Ways and Means Committee’s work to review, modify and introduce bills to the House floor pays off this week. Two bills addressing a number of the HSA issues above and one bill to repeal an ACA tax pass the House now move to the Senate for consideration. H.R. 6311, Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Act of 2018, and H.R. 6199, Restoring Access to Medication Act of 2018, provide many strides in HSA expansion. H.R. 184 seeks the repeal of the medical device tax.
For further details of these three bills, click here.
H.R. 184, H.R. 6199, and H.R. 6311 move to the Senate where they will be taken up at some time for consideration. Unlike the House who will recess for August, the Senate Majority Leader, Mitch McConnell, is requiring the Senate to report for most of August to accomplish a number of things.
The Senate has a full roster of other items to address this August, so it is unknown how long it will take them to review these two bills, and potentially modify, and vote on them. It is likely that we may not see any action until September but are hopeful they will do so before fully getting into the midterm elections in November.
As always, we will watch these bills closely and bring you any new developments. To stay informed of ACA regulations and changes, visit the 2018 ACA Watch page or touch base with your OneDigital consultant.