The Health Care Reform Law and HSA Health Plans

Health care reform became law on March 23, 2010 when President Obama signed the Patient Protection and Affordable Care Act. On March 30, 2010, The Health Care and Education Reconciliation Act was also signed, modifying parts of the existing law.

HSA plans were not significantly impacted; however, two tax provisions in the law will change existing rules for HSA's, beginning in 2011:

  • Tax-free HSA funds no longer can be used to purchase over-the-counter drugs that are not prescribed by a doctor; and
  • Taxes assessed for distributions made on non-qualifying medical expenses increase to 20% from the current rate of 10%.

Some of the most significant provisions in the new health care law are slated to go into effect in 2014. Many of these new rules will change how the insurance market functions and how consumers purchase and use their health plans. Yet to be determined are the details on how specifically the new rules will be implemented and enforced, and so HSA health plans could ultimately be impacted depending on the interpretation of the law. The HSA Alliance will share any developments relating to HSA health plans and health care reform implementation.

HSA health plans continue to bring quality, affordable health coverage to a growing number of Americans, which is why the HSA Alliance is committed to working to protect this health plan choice. We encourage you to get involved by spreading the word and telling your elected officials that you rely on your HSA health plan coverage.

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Thousands of people from all walks of life are sharing with Congress — through letters, phone calls and emails — their personal stories about how they and their family have benefited from the affordability and security of having an HSA.

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While on a family vacation 3 years ago, my husband and I were awakened to, "Mom, Dad, Cari's not breathing!" Our 11 year old always healthy daughter, suffered a cardiac arrest. Fortunately we were covered by Golden Rule and had an HSA account.

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