Today, U.S. Senator Ben Sasse introduced a legislative package designed to increase flexibility, choice, and competition for Nebraska families as they navigate the health care market. 

“America’s health care system is garbage because big insurance companies and big bureaucracies make it nearly impossible for families to manage their own budgets and health needs,” said Senator Sasse. “A lot of politicians on both sides have abandoned the problem altogether and doubled down on big insurance companies or big bureaucracies, but it doesn’t have to be that way. This legislation puts families in the driver’s seat by expanding eligibility for health savings accounts and making sure that those dollars follow families when moms and dads switch jobs. These common-sense proposals ought to pass on their own but, if Congress starts to consider health care legislation this fall, they should be a key part of any patient-centered solution.”

Background on Health Savings Account Expansion Act:  

A health savings account (HSA) allows someone to set aside money tax-free to pay for out-of-pocket medical expenses. Under current statute, an HSA can only be used in coordination with a high-deductible insurance plan. When HSA-qualified plans were first created, high-deductible plans were much rarer, but today most insurance plans qualify as having high deductibles. However, due to archaic definitions in our health care laws, it is estimated that roughly 60 percent of individuals with high-deductible plans do not qualify for an HSA.   

Senator Sasse’s Health Savings Account Expansion Act amends the Internal Revenue Code of 1986 to change the current requirements for a health savings plan to be based on a plan’s actuarial value. Actuarial value is a standard calculation in insurance plans that reflects the percentage of covered health care benefits paid by the insurance plan. Sasse’s bill would open HSA eligibility to nearly everyone with Gold, Silver, Bronze, or lower-tier plans. This change would allow millions more families to set aside tax-advantaged money to pay for their healthcare needs and save for future expenses.

The bill would also increase the amount that families can set aside in these accounts to match the annual deductible and out-of-pocket expenses in their insurance plan, ensuring that families can save enough money to pay for all of their health care costs.

Background on Qualified Health Savings Account Distribution Act:

Under existing law, individuals and families who receive health savings accounts tied to their employer in the form of flexible spending accounts (FSA) or heath reimbursement arrangements lose funds at the end of the year or when they transition to a new job. Currently, only $500 in unused FSA funds can be rolled over into the following plan year and it is difficult for the money to follow the employee from one job to another.

Senator Sasse’s Qualified Health Savings Account Distribution Act would allow unspent money from an employer-based savings arrangement to be rolled into a separate health savings account (HSA), ensuring that funds are not forfeited at the end of the year or following a job transition. Funds should follow individuals. Workers should not lose money they’ve saved based on restrictive federal rules.