Majority Republican lawmakers under the leadership of president-elect have proposed an expansion of health savings accounts accessibility. The proposal makes it easier for one to pass HSAs to heirs, and a two-fold increase in contribution limits
As of June 30th, 18.2 million HSAs had been opened, a 25 percent increase from the previous year. Research shows there has been a 22 percent growth in assets to a $34.7 billion estimate by June. HSAs, which were introduced in 2003, offer you triple tax advantages.
The American Congress and the president-elect propose that HSAs should be part of the individual’s estate and could be transferred to heirs without the fear of death penalty. Currently, tax penalties are not taken for HSAs inherited from a spouse, but they are charged if The HSAs are inherited by someone who is not a spouse included in the heir’s income.
The changes Republicans have proposed include increasing the HSA contribution limits to maximum out-of-pocket limits for high deductible health plans. Therefore if and when those proposals become law each person’s limit would rise to $6,550 from $3,400 and the family limit would increase to $13,100 from $6,750.
House Republicans also propose to change the law so that spouses can be allowed to give catch-up contributions to the same HSA account; it also proposes to sanction qualified medical expenditure before HSA-qualified coverage starts to be refunded from the HSA provided that the account is opened within 60 days. Another proposal from Trump administration and Congress quarters is by repealing the so-called Cadillac tax: a critical factor of the Affordable Care Act, which levies a 40 percent excise tax on all the high-cost health plans. Last year, the start date of the tax was pushed back by a divided to 2020. The new proposal may see the employer Cadillac tax abolished immediately and therefore propel HSAs
HSAs are so popular because of the benefits employees get from them. Regardless of what President elects Trump or the Republican majority Congress does with HSAs, people will be taking n ardent interest in the progress to get the best out of it.