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HSA's and the Affordable Care Act

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HSA contribution rules and contribution criteria were utilized to a large extent in the Adffordable Care act passed by Congress last year in setting up the benefit tiers and essential benefits package for the Health Insurance Exchanges.

HSA contribution rules and coverage criteria under their accompanying High Deductible Health Plans are updated each year. Below are the 2011 rules for each.

2011 HSA Contribution Rules

Employers and employees can make contributions to an HSA (both can now contribute in the same tax year), and all contributions are tax-deductible.

Maximum Contribution Limits for 2011

  • Individual Coverage $3,050
  • Family Coverage $6,150

High Deductible Health Plan Limits For 2011

Minimum AnnualDeductable Out-of-Pocket Maximum
  • Individual Coverage $1,200 $5,950
  • Family Coverage $2,400 $11,900

HSAs and the Affordable Care Act

The minimum level of coverage required to meet the individual mandate was specifically designed to allow for the purchase of a qualified high deductible plan that would complement the HSA.

The ACA creates four benefit categories of plans plus a separate catastrophic plan to be offered through the Exchange, and in the individual and small group markets:

  • – Bronze plan represents minimum creditable coverage and provides the essential health benefits, cover 60% of the benefit costs of the plan, with an out-of-pocket limit equal to the Health Savings Account (HSA) current law limit ($5,950 for individuals and $11,900 for families in 2010);

The Silver (70%), Gold (80%) and Platinum (90%) plans utilize the same out-of-pocket expense rules as the Bronze plan but with higher coverage (70%, 80%, 90%, respectively).

  • The ACA also excludes the costs for over-the-counter drugs not prescribed by a doctor from being reimbursed through an HRA or health FSA and from being reimbursed on a tax-free basis through an HSA or Archer Medical Savings Account. (Effective January 1, 2011)
  • The ACA does increase the tax on distributions from a health savings account or an Archer MSA that are not used for qualified medical expenses to 20% (from 10% for HSAs and from 15% for Archer MSAs) of the disbursed amount. (Effective January 1, 2011)
  • The ACA also creates an essential health benefits package that provides a comprehensive set of services, covers at least 60% of the actuarial value of the covered benefits, limits annual cost-sharing to the current law HSA limits ($5,950/individual and $11,900/family in 2010), and is not more extensive than the typical employer plan. Require the Secretary to define and annually update the benefit package through a transparent and public process. (Effective January 1, 2014)

As you can see the rules set forth in the Affordable Care Act ($5,950 for individuals and $11,900 for families in 2010) have held steady for 2011 as far as the out-of-pocket maximums so that is good news for consumers.

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