Senate Finance Committee Ranking Member Orrin Hatch, R-Utah, and Sen. Marco Rubio, R-Fla., introduced legislation on Thursday to expand and strengthen health savings accounts and flexible spending accounts.
The bill, The Family and Retirement Health Investment Act of 2013, is similar to companion legislation that was introduced in the House by Rep. Erik Paulsen, R-Minn.
Hatch (right), whose committee has jurisdiction over health care policy, said in announcing the bill that “Congress created health savings accounts and flexible spending accounts to help Americans pay for health care. Over the years, these plans have grown in popularity and it’s well past time Congress act to improve them.”
According to Hatch and Rubio, their bill:
- allows a husband and wife to make catch-up contributions to the same HSA;
- removes "onerous" new restrictions on the use of HSA and FSA dollars for the purchase of over-the-counter drugs;
- clarifies the use of prescription drugs as preventive care that will not be subject to an HSA-eligible plan deductible;
- reauthorizes the use of Medicaid health opportunity accounts;
- expands the definition of qualified medical expenses to encourage more exercise and better nutrition;
- allows seniors enrolled in Medicare Part A to continue contributing to their HSAs; and
- allows for the purchase of low-premium health insurance and long-term care insurance with HSA dollars.
The bill is “smart policy to increase access to quality and affordable health care for consumers at an affordable price,” Hatch said.
The senators cited recent findings by Pricewaterhouse Coopers (PwC) Health Research Institute that health care costs are expected to rise 7.5% this year. HSAs and FSAs allow individuals to save for medical costs through tax-deductible contributions.
“When Congress first made HSAs available, these plans only covered 454,000 lives," the senators said. "Today, 13.5 million people are covered under a health plan that is eligible for an HSA.”
“Our health care system is too expensive," added Rubio (right), "and Americans need smart, patient-centered policies now more than ever. Providing families and seniors with more high-quality, yet affordable health care options will empower them to make better decisions about their own health care.”
Read Health Crisis Would Shatter Finances of Most Middle-Income Americans on AdvisorOne.