Republican Study Committee Proposes Significant HSA Changes

The Republican Study Committee (RSC), limited to current Republican members of the U.S. House of Representatives, has released a comprehensive proposal to address perceived weaknesses in Americans’ access to quality, affordable healthcare. A component related to tax-advantaged savings proposes statutory changes intended to expand the use of health savings accounts (HSAs), including significantly liberalizing their provisions.

The RSC’s proposed changes include the following.

  • Permit HSAs to pay health insurance premiums
  • Permit HSAs to pay costs of participation in health sharing ministry, direct primary care (“concierge”), and other nontraditional health insuring arrangements
  • Allow persons whose health insurance is not a high deductible health plan (HDHP) to make HSA contributions
  • Allow persons with no health insurance to make HSA contributions
  • Increase the annual individual HSA contribution limit to $9,000 (currently $3,500)
  • Increase the annual family HSA contribution limit to $18,000 (currently $7,000)
  • Allow annual catch-up contributions ($1,000 for those age 55 or older) to be made to a non-catch-up-eligible spouse’s HSA, if desired
  • Permit persons receiving currently-disqualifying Medicare benefits to make HSA contributions
  • Expand HSA-eligible health services and products beyond those currently allowed to include all Food and Drug Administration-approved over-the-counter/nonprescription medicines (not to include homeopathic or dietary products, or fitness equipment)
  • Allow military Tricare, Indian Health Service, or other veterans’ benefits recipients to contribute to an HSA
  • Permit those with health flexible spending arrangements (FSAs) to make HSA contributions
  • Allow FSA or health reimbursement arrangement (HRA) balances to be converted to HSA assets
  • Allow annual rollover of unused FSA balances to an HSA, at an employer’s discretion
  • Protect HSA accounts in bankruptcy proceedings
  • Prohibit HSAs from being linked to insurance coverage that provides abortion services, and treat abortion services as non-eligible expenses for HSA purposes

The RSC’s proposal is presented as an alternative to one or more Democratic presidential candidates’ support for a “Medicare-for-all” type program, in which the federal government would play a central role in the delivery of health care benefits. The Medicare-for-all approach—support for which is not shared by all Democratic candidates—is not an official Party position for reform of the U.S. healthcare system.