Low-income people will still be able to use health savings accounts (HSAs) after Jan. 1, 2014.
Officials at the Center for Consumer Information and Insurance Oversight (CCIIO) talk about how they will make that possible in a new batch of answers to questions about the Patient Protection and Affordable Care Act of 2010 (PPACA) health insurance provisions that are set to take effect Jan. 1, 2014.
One question in the batch refers to a conflict between HSA plan design rules — which are supposed to make consumers who get routine sick care feel pain in the wallet — and the new PPACA “cost-sharing reduction” rules.
To give users of the HSA tax break “skin in the game,” the Internal Revenue Service (IRS) sets minimum deductible levels for HSA-compatible health plans.
Meanwhile, the new PPACA cost-sharing reduction rules are supposed to provide subsidies to help low-income people cover the cost of health insurance deductibles, co-payment requirements and coinsurance bills, to reduce the pain in the wallet that those low-income consumers feel when they see the doctor or go to the hospital.
For low-income people who want to use HSAs, the problem is that getting help with paying deductibles could make it impossible for a “qualified health plan” (QHP) purchased through an exchange to meet the HSA program “high-deductible health plan” requirements, CCIIO officials said in the new guidance.
“An individual who would not be eligible for the tax advantages of an HSA because the plan variation to which he or she would be assigned does not qualify as a [high-deductible health plan] may purchase the plan without cost-sharing reductions,” officials said.