AAPP member, Dr. Paul Davis asked this question this week, and it is an issue of concern to all of us.

“I have heard that if the current Health Reform Bill passes, they will do away with the HSA option. Is that true, and if so, what can be done about it?”

We asked HSA guru, Roy Ramthun to weigh in with his response.  Here is what he had to say:

Earlier this year, I wrote the attached analysis of the House and Senate bills and their impact on the various provisions that could impact consumer-driven health plans and their related accounts (HSAs, HRAs, and FSAs). Although this analysis does not specifically state that the Senate (or House) bill will kill HSAs, hopefully you will see that there are three primary ways the legislation could create challenges for them (below).

Depending on the outcome of regulatory decisions, HSAs could be hindered or not affected. I will following these issues closely as things develop further.

Potential Challenges:
Requiring plans to meet a minimum actuarial value (60% in the Senate bill) that does not include the value of contributions to the HSA account, thereby excluding HSA-qualified plans with higher deductibles.

Requiring plans to meet minimum “medical loss ratio” standards (85%) that may be appropriate for HMOs but not HSA-qualified plans with high deductibles.

Mandated benefits that must be provided on a first-dollar basis. We don’t know what they are yet but there is no restraint on the Secretary of HHS’ ability to require that benefits be exempt from deductibles, which could conflict with HSA requirements that nothing other than preventive care be exempt from the plan deductible.

Let me know if you have further questions.  FYI, I will cover this material in my AAPP presentations in New York on 4/10 and San Francisco on 4/24.

Roy Ramthun, President
HSA Consulting Services