Bill Overview
Title: Health Savings Accounts For All Act of 2022
Description: This bill revises provisions relating to health savings accounts (HSAs). Specifically, the bill increases the annual limitation on tax-deductible contributions to HSAs by plan participants and their employers; eliminates the requirement that an HSA participant must be enrolled in a high deductible health plan as a condition of eligibility; allows payments from HSAs for health insurance premiums and primary care service arrangements; allows payment of medical expenses incurred prior to the establishment of an HSA and correction of administrative errors prior to the due date of an applicable tax return; allows a tax-free rollover of amounts in an HSA, upon the death of an account holder, to the account holder's child, parent, or grandparent; allows payments from HSAs for vitamins, dietary supplements, gym membership, and wearable fitness trackers; and extends bankruptcy protections to HSAs on the same basis as tax-preferred retirement plans.
Sponsors: Sen. Paul, Rand [R-KY]
Target Audience
Population: People using or interested in using Health Savings Accounts
Estimated Size: 70000000
- Health Savings Accounts (HSAs) are utilized by individuals to save money for future medical expenses in a tax-advantaged way.
- Currently, HSAs require a high-deductible health plan (HDHP) to qualify, which limits eligible users. This bill removes that requirement, potentially allowing many more individuals to participate.
- Individuals not currently eligible for HSAs, including those with non-HDHPs or those who are uninsured, could benefit from the amendments in the bill.
- Anyone currently using HSAs or interested in tax-advantaged healthcare savings could be interested in and affected by these changes.
- Employers who offer HSAs as part of their benefits package will see changes in how they can contribute, potentially impacting many workers.
- Dependent upon healthcare plan structures and offerings, these changes could broadly impact the insured populace.
- Globally, HSAs or equivalent savings accounts are not typically utilized outside the US, limiting international impact.
Reasoning
- The target population of the policy includes people who are currently using Health Savings Accounts or are interested in them. This includes individuals with various health insurance plans, not just high-deductible plans, due to the removal of the HDHP requirement.
- The policy budget and target size suggest a focus on a significant portion of the 30 million existing HSA users and potentially 40% of the total insured population, which is approximately 300 million.
- The removal of the HDHP requirement will make HSAs accessible to more people, possibly increasing adoption significantly among middle-income families and those with standard insurance plans.
- The provision for payment of premiums and rollovers suggests benefits for both the account holders and their beneficiaries, potentially aiding families across different income levels.
- The capability to pay for gym memberships and vitamins makes the policy attractive to health-focused individuals.
- Given the budget constraints and large population in consideration, a range of impacts is expected, from none to high, depending on the extent of direct utilization of enhanced HSA features.
Simulated Interviews
software engineer (New York City, NY)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 5/20
Statement of Opinion:
- I think this policy is quite beneficial. It encourages saving for health needs and takes away some of the financial stress.
- I appreciate the ability to use funds for health premiums and exercise-related expenses.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 6 |
| Year 20 | 10 | 6 |
freelancer (Austin, TX)
Age: 26 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- I might start using an HSA now that I don't need a high-deductible plan.
- It's a good policy for someone like me who usually can't qualify for these savings.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
business executive (Seattle, WA)
Age: 52 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 5.0 years
Commonness: 3/20
Statement of Opinion:
- I already make use of an HSA, so these changes sound beneficial, especially for estate planning.
- The ability to use funds for more types of expenses is a plus.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
teacher (Chicago, IL)
Age: 34 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 6/20
Statement of Opinion:
- Having more flexibility with my HSA funds would help a lot.
- I like that my contributions will have tax advantages.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 9 | 6 |
retired (Miami, FL)
Age: 68 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- Now I might use an HSA to manage healthcare expenses, even in retirement.
- Rollover benefits to my family is a strong advantage.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
nurse (Los Angeles, CA)
Age: 29 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 15.0 years
Commonness: 7/20
Statement of Opinion:
- This could be a way to save more and eventually pay off debts faster.
- Gym membership payments are an added plus for my lifestyle.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 9 | 5 |
small business owner (Houston, TX)
Age: 53 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 2/20
Statement of Opinion:
- These changes allow me to contribute more to my employees' HSAs, which might attract better talent.
- It broadens the use of HSA funds, which is beneficial.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
startup founder (San Francisco, CA)
Age: 39 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 20.0 years
Commonness: 3/20
Statement of Opinion:
- Greater HSA contribution limits fit my desire to save in a volatile income scenario.
- I see increased flexibility without the high deductible pressure.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
graphic designer (Denver, CO)
Age: 31 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- If I can open an HSA, it might improve my financial and health outlook.
- I might prioritize fitness more with this support.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
college professor (Boston, MA)
Age: 61 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- There’s already a benefit with my HSA, these changes just fine-tune it.
- The policy supports easier transitions for my family if needed.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Cost Estimates
Year 1: $5000000000 (Low: $4000000000, High: $6000000000)
Year 2: $6000000000 (Low: $5000000000, High: $7000000000)
Year 3: $7000000000 (Low: $6000000000, High: $8000000000)
Year 5: $9000000000 (Low: $8000000000, High: $10000000000)
Year 10: $12000000000 (Low: $10000000000, High: $14000000000)
Year 100: $15000000000 (Low: $12000000000, High: $18000000000)
Key Considerations
- The policy expands the tax advantages of HSAs, thereby significantly reducing taxable income, mainly impacting tax revenues.
- The expansion affects a considerable number of potential new participants, raising both the utilization of HSAs and associated transactional health expenditures.
- HSAs under the new guidelines could potentially lead to increased saving behaviors among individuals preferring preventative over reactive healthcare.
- The extension of HSAs to cover broader expenses could lead to shifts in personal healthcare budgeting and investments, potentially affecting related industries and services.