ObamaCare May Be Fatal to Your HSA

This is from Kathryn Nix:

A recent analysis by Roy Ramthun concludes the new law will probably lead to major changes in how consumers can use Health Savings Account plans.

The new law limits these consumer-controlled accounts in two ways:  it restricts the types of health products you can purchase with your HSA money, and it doubles—to a whopping 20 percent—the tax penalty for withdrawing HSA funds to cover non-medical expenses.

But the worst news is the provision requiring all policies to cover at least 60 percent of the actuarial value of the benefits offered.  What’s the actuarial value?  Will contributions to HSAs be included in these actuarial-value calculations?  HHS Secretary Kathleen Sebelius will make that call.  And if she rules “no,” then high-deductible health plans including HSAs will no longer be viable… and you can kiss your plan good-bye.

Comments (8)

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  1. Devon Herrick says:

    Since opponents of HSAs assume HSA holders only buy them because they’re healthy, the inclination will be for HHS to curtail the use of HSAs so the “unspent” funds that would accumulate in the HSAs are instead, left in the insurance pool.

  2. Virginia says:

    Why does it have to get so complicated? It was so much simpler when you went to the doctor when you were sick and paid the bill when it came in the mail.

    If the goal of Obamacare is to create a culture of dependence on government, then the HSA is going to be their first target. Demonstrating your ability to pay for your own care is detrimental to the goal of a single-payer system.

  3. Wiley Long - HSA for America says:

    This is a huge decision that Sebelius will be making. People in the individual market will already be facing huge rate increases as a result of this legislation, and high deductible HSA-qualified plan are really the only recourse people will have to lower their costs. If she rules no, it could add to the backlash as more and more people find them unable to afford health insurance. If she says yes, it could explode the use of HSAs, and provide some hope that we don’t end up with a single government-payer system.

  4. Wiley Long - HSA for America says:

    By the way, when is she expected to make this decision?

  5. Devon Herrick says:

    Wiley, I understand that the HHS secretary can review “essential benefits” annually. The arbitrary nature of the power HHS Secretary Sebelius will have over our benefit packages is scary.

  6. Nancy says:

    The problem is, there is hardly anyone in the Obama Administration who appears to like HSAs. Contrast with the previous administration, which actively promoted them.

  7. Ken says:

    Everything about Obama Care is scary.

  8. Kartik says:

    HSAs are beneficial – they empower individuals to shop around for the best price and care. Insurance reimburses for major events.

    Do Insurance companies profit? Of course, like any other business. But they pay most of the premium money on medical care.