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Ignagni Urges Lawmakers to Build on the Success of HSAs
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Ignagni Urges Lawmakers to Build on the Success of HSAs
WASHINGTON, D.C. – Karen Ignagni, President and CEO of America’s Health Insurance Plans (AHIP) today outlined a series of common-sense policy recommendations to expand access to health savings accounts (HSAs).
Testifying before the House Committee on Ways and Means, Ignagni said that HSA-eligible, high-deductible health plans (HDHPs) have quickly become valued health coverage options for consumers and employers and urged Congress to take the lead in facilitating the next generation of HSAs.
“HSAs are helping a substantial number of previously uninsured consumers purchase coverage, accumulate savings for their future medical needs, and access preventive care services. HSAs also are enabling many small employers to offer health coverage to their employees for the first time,” Ignagni said.
“Now is the time for Congress to build on this track record by ensuring that HSAs can meet the needs of those with chronic conditions, leveling the playing field for those seeking coverage in the individual market, and rewriting the rules that prohibit Medicare beneficiaries and many veterans from even considering HSAs as an option,” said Ignagni.
Ignagni also described a recent AHIP member census which found that 3,168,000 people were covered by HSA-eligible HDHPs as of January 2006. The census found that 31 percent of those purchasing these plans in the individual market were previously uninsured, and that one third of policies purchased in the small group market were purchased by companies that previously did not offer coverage.
AHIP’s Policy Recommendations to Create the Next Generation of HSAs
Expanding Coverage for the Chronically Ill
* Allow employers to assist employees or their family members who suffer from chronic conditions by permitting increased contributions into the HSAs of individuals who are enrolled in disease management or care coordination programs.
* Allow HDHPs to cover certain prescription drugs used to treat chronic conditions without the patient first being required to satisfy the minimum annual deductible on the HDHP.
Encouraging Families to Participate in HSAs
* Allow individuals to establish an HSA if their spouse has a Flexible Spending Arrangement (FSA).
* Allow HDHPs for family HSAs to include separate deductibles, also known as “embedded deductibles,” for individual family members below the overall family deductible.
Promoting Tax Parity and a Level Playing Field for Individuals
* Enact an above-the-line tax deduction for all health insurance coverage, including HSA-compatible health plans, purchased in the individual market.
* Enact tax credits to help low-income persons purchase HSA-compatible health plans and other types of health insurance.
* Increase HSA contribution limits to allow consumers to contribute an amount equal to the out-of-pocket limits of their HDHP.
Expanding Access to Early Retirees, Seniors and Veterans
* Allow early retirees (ages 55-64) to use HSA funds to purchase retiree health coverage.
* Allow seniors to use HSA funds to purchase Medigap coverage to complement Medicare.
* Allow veterans who use Veterans Administration (VA) health care facilities to contribute money to an HSA. Under current law, any veteran who has accessed the Veterans Administration medical system within the past three months is prohibited from putting money into an HSA. This restriction hurts veterans – especially returning service personnel who have service-related injuries.
Giving Employers More Flexibility
* Allow employers to combine HSAs with FSAs or Health Reimbursement Arrangements (HRAs) to cover medical expenses below the HDHP’s deductible.
* Allow individuals with unspent funds in employer-based FSAs or HRAs to transfer these funds into their HSAs.
Easing Administrative Burdens
* Give employees the opportunity to make the full annual contribution when they enroll during the middle of a plan year, or permit the employer to charge a smaller deductible.
* Announce the annual adjustment of deductible amounts, out-of-pocket expense limits, and contribution limits by June 1 each year to give employers sufficient time to determine their plan offerings for the new year.
* Extend to April 15 of the second year the deadline to set up an HSA account once a consumer signs up for a HDHP to allow for payments to be made for health costs incurred during the previous year.
