In a recent article by Advisor One, it was reported that a new bill is being discussed that will strengthen Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs). This new bill was introduced by Senators Orrin Hatch (R-Utah) and Marco Rubio (R-Florida) who believe that because HSAs and FSAs have been growing in popularity, it is time for them to be reviewed and improved.
Both HSAs and FSAs are tax-advantaged savings accounts that are used to pay for certain medical expenses; funds in an FSA may also be used to defray costs of dependent care or costs. HSAs are for people covered under high-deductible health plans so that they can pay for medical costs not covered under their plans.
The bill, called The Family and Retirement Investment Act of 2013, recommends several changes:
- Allow a husband and wife to make catch-up contributions to the same HSA
- Remove “onerous” new restrictions on the use of HSA and FSA dollars for the purchase of over-the-counter drugs
- Clarify the use of prescription drugs as preventive care that will not be subject to an HSA-eligible plan deductible
- Reauthorize the use of Medicaid health opportunity accounts
- Expand the definition of qualified medical expenses to encourage more exercise and better nutrition
- Allow seniors enrolled in Medicare Part A to continue contributing to their HSAs
- Allow for the purchase of low-premium health insurance and long-term care insurance with HSA dollars
These possible changes to HSAs and FSAs will make paying for medical expenses easier than before and encourage people to save more money for future medical expenses in specific, tax-advantaged accounts. You can learn more about HSAs on our website or contact the professionals at Next Generation Trust Services for answers to any questions you have about HSAs as well as all types of self-directed retirement accounts.