Debate: Would This HSA Expansion Bill Help Taxpayers?

Bloink: These proposals do much more than merely raise the annual HSA contribution limit substantially. They also allow employers to avoid offering health coverage to employees when they otherwise would be legally mandated to do so. Instead, employers would be entitled to simply fund the individual’s HSA and allow those funds to be used to purchase health coverage in the individual market to satisfy the ACA employer mandate. 

Byrnes: It makes complete sense to raise the annual contribution limit so that it actually is likely to exceed the individual’s deductible, so that the individual then actually has the funds necessary to make their health insurance plan work for them — assuming that the individual is able to maximize pretax HSA contributions in the first place. 

Bloink: While giving the employee the choice to use HSA funds to buy marketplace coverage is a positive step, letting employers off the hook for offering health coverage at all circumvents important protections put into place under the ACA for a reason. It’s also likely to create confusion for individuals who must then evaluate health plans and determine whether the health plan qualifies for an HSA in the first place.

Byrnes: With low HSA contribution rates, it can take several years of funding (assuming the individual makes no actual withdrawals to cover health-related expenses over the funding period) to cover a single year’s plan deductible. Contribution limits at minimum must be high enough to allow employees who max out their contributions to satisfy their plan deductibles.

Bloink: By this point, we all should recognize that the Affordable Care Act, while not perfect, provides critical protections for millions of Americans. If this proposal became law in its full form, it would strip some of those important protections by giving large employers the option of not offering comprehensive health coverage in the first place — essentially placing the burden on the individual to find a qualifying plan. 

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