August 6, 2018

How Much Will The HIT Hit You?

Before adjourning for its August recess, the U.S. House of Representatives passed two important pieces of health care legislation.

H.R. 6311, Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Act of 2018, and H.R. 6199, Restoring Access to Medication and Modernizing Health Savings Accounts Act of 2018. H.R. 6311 included a two-year delay of the Health Insurance Tax (HIT) and would make key reforms to Heath Savings Accounts (HSAs) and Flexible Savings Accounts (FSAs) by nearly doubling contribution limits to HSAs for individuals and families and allowing a carryforward balance to the following year for a health FSA.

If the Senate passes and the president signs H.R. 6311 into law, the HIT would take effect in 2022 instead of 2020. As the Stop HIT Coalition explains, the HIT is a multi-billion dollar tax imposed on health insurance premiums for poor and middle class workers, seniors, small businesses, and Medicare and Medicaid beneficiaries. The tax would cost families earning between $75,000 and $100,000 more than $2,000 year and it would cost those earning between $50,000 and $75,000 almost $3,000.

H.R. 6199 would allow employees to use their HSAs to pay for direct primary care clinics and more robust wellness programs. The bill also would remove restrictions for certain over-the-counter medications and health care items for all tax-favored health accounts and would further incentivize the use of telehealth and other innovative primary care offerings by allowing the HSA to cover a portion of the employee’s deductible in an HSA-eligible high-deductible health plan.

House members passed H.R. 6311 on a bipartisan 242-176 vote while H.R. 6199 passed with the support of 46 Democrats and 231 Republicans.