Login Register Subscribe
Current Issue

Employer benefit groups back bill allowing larger HSA contributions

Reprints

Employer benefit groups back legislation that would sharply increase the maximum annual contribution that could be made to employees' health savings accounts, but they also warn that winning congressional approval will be difficult.

Under the measure that the House Ways and Means Committee approved last week on a 23-15 vote, the maximum contribution limit for employees enrolled in high-deductible health plans in 2017 could contribute up to $6,500 for single coverage and $13,100 for family coverage.

H.R. 5445 would nearly double the 2017 maximum HSA contributions, which now are $3,400 for employees with single coverage and $6,750 for workers with family coverage.

“This will help employees save to help pay for future health care expenses while they are working,” said Steve Wojcik, vice president of public policy at the National Business Group on Health in Washington.

“This will help employees pay for out-of-pocket expenses in a tax-effective way,” said James Gelfand, senior vice president of health policy at the ERISA Industry Committee in Washington.

But Mr. Gelfand warns that congressional passage of the measure is far from certain.

“It will be tough because of projected revenue loss,” Mr. Gelfand said, referring to last week's estimate by the congressional Joint Committee on Taxation that H.R. 5445 would reduce federal tax revenue by nearly $20 billion from 2017 through 2026.

Another challenge is the shrinking amount of time left in the current congressional session.

“There is a competition for floor time,” Mr. Gelfand said.

“We are hopeful, but we will just have to wait and see,” said Mr. Wojcik.

The measure also would increase how much older employees could contribute to HSAs. Under current law, employees 55 and older can make an extra $1,000 catch-up contribution to their HSAs each year. Under the new bill, employees with a spouse 55 or older could make another $1,000 catch-up contribution.

A separate bill, H.R. 210, also approved by the Ways and Means Committee would allow colleges and universities to exclude student employees, such as graduate teaching assistants, from the health care reform law's so-called employer mandate that imposes a financial penalty — currently $2,160 per employee — on employers that do not offer coverage to employees working an average of at least 30 hours per week.

It isn't known when the full House will consider the proposals.