The Supreme Court recently ruled that the Health Care Tax Bill as Constitutional and it will therefore continue to take hold of the country’s healthcare. If you have an HSA, then you too will be affected by this ruling in more ways than one. In fact, you may have already felt some of the effects.
Impact Already Felt
Already the Health Care Tax Bill has changed the way in which those who have health savings can go about using them. For example, before the Health Care Bill the penalty for an unqualified distribution was 10%. Now, should you choose to make such a distribution then the penalty is a whopping 20%. Better save those receipts and completely understand the rules before using them.
Also, affected is what you can spend the funds on. The Health Care Bill changed the definition of “qualified” though not by much. As it stands now, participants are no longer allowed to get over-the-counter medications with health savings funds without paying a 20% penalty. So, should you decide that you want to get some over-the-counter cough medicine, you will want to pay for it out of pocket or face a 20% penalty for using funds from your account in an unqualified manner.
Impact to Come
Under the provisions of the Patient Protection and Affordable Care Act (PPACA) new health care regulations, health care contributions will soon be limited to $2,500 per year. This will be a drastic drop from the $3,100 that was allowed in 2012. Even though it is only a $600 difference, that can be a lot if you take into consideration the lost contributions for future years to come along with any lost appreciation that those dollars may have represented.
In addition, high deductible health plans (HDHPs) will soon be required to offer more services, known as essential benefits. This increase in services will almost certainly mean an increase in the premiums that participants will have to pay.
Some Impacts Unknown
Unfortunately, the Health Care Tax Bill is still unfolding by the day. While there have already been immediate impacts to participants, and there is a clear path of more to come there are still more changes that will likely unfold. These are changes that either aren’t currently known or don’t currently exist. This could easily occur as an amendment to the Health Care Tax Bill could happen and cause more ill effects on them so stay tuned to this blog. Should that happen then there is no telling what results we could witness.
Learn more about HSAs and all their rules and regulations here.