Legislative changes will make tax-free HSAs accessible to more Americans, providing financial support for healthcare expenses now and in retirement
Health-E Commerce, parent brand to FSA Store and HSA Store, commends members of the U.S. House of Representatives and U.S. Senate for including critical HSA and dependent care assistance expansions in the “One Big Beautiful Bill Act” (HR. 1), the sweeping budget reconciliation package that was passed by both chambers of Congress.
Despite the continued growth of HSAs (which have increased by $64B in total assets from 2020-2024, according to Devenir), and the widespread recognition of their value in helping Americans save for current and future healthcare costs, there have been few substantive changes to these accounts since their inception in 2003. The provisions recently signed into law reflect a significant step forward in empowering more Americans to take control of their health and finances through increased access to tax-free HSAs.
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“Congress deserves praise for including the HSA provisions in the budget reconciliation bill. Not only is this an essential step toward empowering Americans to take greater control of their healthcare, but it reflects a smart, forward-thinking commitment to affordability, flexibility, and personal choice, at a time when individuals and families are feeling financial strain,” said Zack Peckham, CEO of Health-E Commerce.
The reforms include some long-awaited improvements to HSA accessibility, including a permanent expansion of the telehealth safe harbor for high-deductible health plans (HDHPs), which allows HDHPs to cover telehealth prior to the deductible (also known as first-dollar coverage), while still allowing plan participants to open and contribute to an HSA.
This legislation also expands HSA access by making Bronze and Catastrophic plans on the Affordable Care Act marketplace HSA-qualified health plans. Additionally, those covered under a Direct Primary Care Service Arrangement will not be disqualified from opening and contributing to an HSA, and the legislation allows the use of HSA funds to pay for Direct Primary Care Service Arrangement fees (with limitations).
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“These common-sense provisions are a win for working Americans, and they will make HSA utilization more attainable to a broader population,” said Itamar Romanini, vice president and general manager of HSA Store. “HSAs are among the most effective, consumer-driven health financing tools we have, and the decision to make them more inclusive is the right decision.”
This legislation also eases the financial burden on working families by raising the annual contribution limits for dependent care FSAs to $7,500 ($3,750 for those married and filing separately). This marks the first permanent increase of these limits since 1986, and it will allow families to set aside more pre-tax income to cover essential caregiving expenses such as daycare and after-school programs. These changes will help parents and caregivers balance work responsibilities with family needs. Modernizing and expanding access to these vital benefits helps support economic stability and wellbeing for millions of American households.
As the leader in consumer education for HSAs and FSAs, Health-E Commerce educates employers, third-party administrators, and individual account holders on the impact that legislative changes and new eligibility rules have on these accounts.
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Source : PR Newswire
