The House Ways and Means Committee passed Congressman Erik Paulsen’s (MN-03) Health Care Security Act. The legislation, which now moves on to the House of Representatives for a vote, would expand access to Health Savings Accounts (HSAs) and make them more affordable. These reforms provide more health care choices and flexibility for individuals and families in Minnesota and across the country.

“Twenty million people are using HSA-eligible health plans because they want more choice and flexibility when it comes to health care decisions,” said Paulsen. “It's important to streamline and expand access tothese popular accounts so that we can further empower patients as consumers. This bill is a commonsense way to improve HSAs for individuals and families as they look to save for future health care expenses.”

Click here for video of Paulsen’s remarks at the committee.

Specifically, H.R. 5445 would:

Section 1: Catch-Up Spouse. Under current law, if both spouses are HSA-eligible and age 55 or older, they must open separate HSA accounts for their respective “catch-up” contributions. The provision would allow both spouses to deposit their catch-up contributions into one account.

Section 2: Special rule for certain medical expenses incurred before establishment of HSA. Under current law, taxpayers may use HSA funds only for qualified medical expenses incurred after the establishment of the HSA, which might be some time after the establishment of the associated health plans. If, for example, the taxpayer purchases a HSA-eligible health plan and then immediately incurs medical expenses before opening the HSA, the taxpayer may not use tax-favored HSA funds to pay the expenses.

The provision would treat HSAs opened within 60 days after gaining coverage under a HSA-eligible health plan as having been opened on the same day as the health plan. This would allow for a reasonable grace period between the time of coverage through a HSA-eligible health plan and the establishment of an HSA.

Section 3: Maximum contribution at deductible and out-of-pocket level. Under current law, annual HSA contributions are limited. These limits are updated annually for inflation and are less than the combined annual limit on out-of-pocket and deductible expenses. The provision would allow HSA-eligible individuals to contribute an amount equal to the combined annual limit on out-of-pocket and deductible expenses under their HSA-qualified insurance plan.

Paulsen, a champion of small business and advocate of free enterprise, entrepreneurship, and innovation, serves on the House Ways and Means Committee, the bicameral Joint Economic Committee, and is co-chair of the Congressional Medical Technology Caucus.

For more information on Congressman Paulsen’s work in Congress visit Paulsen.house.gov