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2006 News

December

Congress Passes HSA Changes
H.R. 6111 was passed by Congress on December 8, 2006 and signed into law (PL 109-432) by the President on December 20, 2006. Included in this tax bill were positive changes to the HSA law.
The HSA provisions include:
Allow a one-time rollover of HRA and Health FSA into an HSA.
Allow one-time rollover from IRA to HSA.
Remove current limitation on HSA contribution amount that says that contributions can be no larger than the policy owner’s in-network deductible. Instead, contributions to HSAs are allowed to the maximum allowed under current law, regardless of the policy’s deductible.
Earlier announcement (March instead of August) of the annual cost-of-living adjustments for HSA contribution and deductible amounts.
Allow full annual contribution amount for those who become eligible and create HSAs mid-way through the year.
Allow employer contribution to HSAs to be greater for non-highly compensated employees.
These HSA provisions are estimated to cost one billion over ten years.

For a more detailed explanation of the changes to Health Savings Account law, here is a brief written by AHIP, America's Health Insurance Plans.

SEptember

Wednesday, 9/27 - The House Ways and Means Committee approved HR 6134 - the Health Opportunity Patient Empowerment Act of 2006 with a vote of 24-14.  The bill would make modest changes and expansions to Health Savings Accounts.

Summary of HR 6134, as passed by Committee(PDF)

12-page analysis of HR 6134 by the Joint Tax Committee (PDF)

Latest Census Figures on the Uninsured by State (PDF)

august

The Census Bureau released the latest figures on the increasing number of uninsured individuals.  Highlights from the full report include:

• The number of those without health insurance went up from 45.3 million in 2004 to 46.6 million in 2005.
• The percentage of individuals going without coverage increased from 15.6% in both 2003 and 2004 to 15.9% in 2005.
• Percentage with employer-sponsored coverage declined from 59.8% to 59.5%.

JUNE

U.S. House plans to consider a variety of health bills, and they may include provisions that would further expand Health Savings Accounts.

MAY

Report from an online broker selling health insurance plans from most major carriers describes who was buying Health Savings Accounts/High Deductible Health Plans in 2005.

• 41% were previously uninsured.
• 50% of those under 30 were previously uninsured.
• HSA plans were 22% less expensive for families than other coverage ($2132 per year vs. $4008).

House Republicans introduced a bill incorporating President Bush's 2007 budget proposals that would expand Health Savings Accounts and make them more affordable.

March

AHIP Report shows nearly 3.2 million have HSA/HDHs (PDF)

Other report highlights:

• 31% of individuals purchasing HSA/HDHPs were previously uninsured
• 50% are age 40 and above
• HSA/HDHP plans average premium cost $1121 (individual) and $2507 (family)

FEBRUARY

Carrier Says 43% Lacked Coverage Before HSAs (PDF)

Assurant Health, a major carrier in small group and individual market has sold over 250,000 HSA/HDHPs. Purchaser demographics include:

• 29% of HSA purchasers have income of less than $50,000
• 20% of HSA purchasers have income less than $25,000
• 43% of HSA purchasers did not indicate having prior health coverage

President Submits New Health Agenda to Congress (PDF)

In February, the President released budgetary and legislative proposals which would create incentives for market-oriented solutions to help the uninsured and expand the use of Health Savings Accounts.

High-Risk Pool Legislation Passes Congress (PDF)

On February 1, Congress passed legislation reauthorizing federal grants to state high-risk pools, and provided $75 million in grant funding for 2006.