Beginning in 2014, under the Affordable Care Act 2010 (a.k.a. Obamacare), families and individuals will be required to have a government approved health insurance plan, or else they’ll be subject to a fine. To select a plan, the ACA set up health care exchanges by state which allow people to choose from 4 different tiers of plans: bronze, silver, gold, and platinum. As you progress from the lowest level, bronze, to the highest level, platinum, the percentage of healthcare expenses that that plan will cover increases in increments of 10% (Bronze = 60%, Gold = 70%, etc.). As a result, the more your plan pays towards your healthcare expenses, the higher your monthly premiums will be.
For those with HSAs, many feared that the ACA would eliminate these accounts. However, we now know that HSAs will still qualify under bronze plans, but will be subject to new limitations and requirements. Here’s what you can expect to change:
HSA Bank Accounts
- Funds withdrawn for non-medical purposes will be assessed a 20% penalty plus income tax (a penalty of only 10% before)
- Over-the-counter drugs now require a prescription from a physician for reimbursement
HSA Insurance Plans
The Internal Revenue Service announced higher limits for 2014 on contributions to HSAs and for out-of-pocket spending under high-deductible health plans (HDHPs) linked to them. As mentioned before, under a bronze plan, insurance must cover 60% of the yearly amount the average policyholder spends on healthcare. In 2014, out-of-pocket expenses for these bronze plans will be capped at $6,350 for individuals and $12,700 for families (compared to $6,250 and $12,500 in 2013). When it comes to contribution limits, individuals are now capped at $3,300 for individuals and $6,550 for families (compared to $3,250 and $6,450 in 2013). A complete table of the changes is listed below.
How consumers can expect to save in 2014
With the introduction of these new laws in 2014, consumers with HSAs can expect to see some savings from their current health insurance plans. Here’s how:
1.) Free preventative care and annual checkups
Under the ACA, new private health plans are required to cover and eliminate cost-sharing (co-payment, co-insurance, or deductible) for proven preventative measures like cancer screenings and immunizations.
2.) Discounts and subsidies
If you earn between $11,505 and $46,021 for an individual, or $23,425 and $93,700 for a family of four, and you aren’t covered by your employer, you can qualify from a discount in the online marketplaces. In addition, if you earn less than $34,516 for an individual or $70,275 for a family of four, and you purchase your policy on the exchange, you could eligible to receive subsidies to lower your out of pocket costs.
With the introduction of the ACA in 2014, consumers with HSAs will certainly notice some important changes in their health insurance spending. Make sure you talk to your health insurance provider about possible changes to your current policy. Then, talk to your local FNB representative to discuss how these changes can affect your health insurance budgeting/saving for your HSA.