Proposed Bill Would Change Some HSA Rules

December 15, 2005 – The Flex Health Savings Account Act of 2005 (H.R. 4511) has been introduced by Rep. Eric Cantor (R-Va.). The bill would allow taxpayers to make the maximum statutory annual contribution to an HSA even if their qualifying high deductible health plan (HDHP) has a policy deductible that is lower than the statutory contribution limit. For example, a single coverage HDHP has a $2,000 deductible. The Act would dictate that the maximum HSA contribution would be the $2,650 statutory limit (for 2005), not the $2,000 deductible.

The bill would also allow simultaneous contribution to an HSA, employee contributions to an employer-sponsored health flexible spending account (FSA), and employer contributions to a health reimbursement account (HRA). A taxpayer’s maximum HSA contribution would be offset by that employee’s contributions to an FSA, and by employer contributions to an HRA on behalf of that employee. The bill has been referred to the House Ways and Means Committee, and has the backing of the House republican leadership.