The Affordable Care Act (ACA) has influenced many areas of health care and health insurance. As such, the rules for account-based health plans, including health savings accounts (HSAs) may have changed. This article describes how the health care reform and the ACA HSAs affected.
Background information on Health Savings Accounts
HSAs are individual bank accounts of staff in possession, allowing for tax-free payment or reimbursement of eligible medical expenses. An employer usually provides an HSA qualified high deductible health plan and an HSA.
Either the employer, the employee, or a third party can contribute to the accounts. In order to have an HSA, an individual must have an HSA qualified high deductible health plan. Individuals may refunds for unreimbursed health care costs received as by IRC 213 defined (d). Moreover, the unemployed can receive reimbursements for health insurance premiums.
Increased fees for non-medical withdrawals
For persons under 65, there are penalties for withdrawing money from an HSA for non-medical expenses. These withdrawals would be taxed as ordinary income for the account holder. While there are for non-medical withdrawals are 10 percent penalty is used, the penalty has increased to 20 percent this year.
exclusion of over-the-counter medications
Most over-the-counter (OTC) drugs are taken not as qualified eligible costs into consideration, unless prescribed by a physician. The new restrictions do not apply to the purchase of insulin, diabetic testing supplies, contact lens solution, contact lenses, and many OTC durable medical supply (batteries for hearing aids, crutches, wheelchairs, orthopedic aids, etc.)
Additional Resources
For information minimum deductibles required and out-of-pocket maximums in 2015 on HSA see health savings account -. HSA 2015 rules and requirements
For comprehensive information on HSA contribution limits in 2015, see 2015 HSA contribution limits.
For tips on maximizing HSAs 5 tips can be found to maximize under HSA.
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