Increased Contribution Limits and Expanded Use for Health Savings Accounts (HSA)
This Act increases contribution limits for Health Savings Accounts (HSAs) to match retirement account limits and allows individuals without a high-deductible health plan (HDHP) to use them. It also expands the list of qualified expenses to include direct primary care service arrangements, vitamins, supplements, and gym memberships. Furthermore, HSA funds receive the same bankruptcy protection as retirement funds.
Key points
Increased HSA contribution limits: The maximum annual contribution is aligned with the limit for retirement accounts (under section 402(g)), with additional catch-up contributions for individuals over 50.
Removal of HDHP requirement: The Act removes the 'eligible individual' definition, allowing HSA participation without requiring a High Deductible Health Plan.
Expanded qualified expenses: HSA funds can cover fees for direct primary care service arrangements and wellness expenses like vitamins, dietary supplements, gym memberships, and wearable fitness trackers.
Bankruptcy protection: HSAs will be treated in the same manner as individual retirement accounts (IRAs) for bankruptcy purposes.
Inheritance and error correction changes: Allows an HSA to be treated as the account of a child, parent, or grandparent upon the account holder's death (rollover). It also permits the correction of administrative contribution errors before the tax filing deadline.
Status:
Expired
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