Health Savings Accounts (HSAs) were enacted by the federal government in 2003 to help employees with high deductible medical insurance plans. The advantage of a high deductible plan is that the monthly premiums are low. The disadvantage is that if an employee has a medical expense, they must first satisfy the high deductible before they receive the insurance benefit. Some employees may not have the cash on hand to pay the deductible.
To help alleviate that problem, HSAs offer a mechanism where employees can save money on a pre-tax basis and then that money can be used to pay their deductibles. Often employers will contribute to the employees’ HSA account.
The HSA law was written with strict guidelines based on the state of health plans in 2003. However, health plans have evolved since then. So now many health plans with high deductibles no longer meet the requirements of the strict HSA guidelines.
The solution is to reform the regulations, and the good news is, a new proposed bill will do that. The Pandemic Healthcare Access Act sponsored by Sen. Ted Cruz would allow all individuals who have health insurance to open an HSA, which could benefit 225 million Americans.
See more information at https://www.benefitspro.com/2020/07/21/its-time-to-emancipate-the-hsa/