HSA Benefits Changed under “ObamaCare”
Health Savings Accounts (HSAs) are featured in the health insurance reform bill but I haven’t heard anyone mention yet. The new change will affect over 8 million plus people with HSAs so why isn’t it news? Effective January 1, 2011, taxpayers with HSAs no longer will be allow to use them to purchase over-the-counter medicines. This is according to Sec. 9003 of the Health Reform Act. Previously if you had an HSA and needed aspirin you could pay for it with your HSA account…meaning you got the aspirin tax free! But not anymore after the new year. This new restriction will also apply to individuals with Flexible Spending Account or Health Reimbursement Accounts.
Unfortunately you cannot include all the details of the health care reform in 4 minutes. We have watched this white house video over and over and there is no mention of changing HSA tax benefits.
Additionally 2011 will mark the first time HSA 20% penalties will be assessed for non-qualified withdrawals from your Health Savings Account. You can learn more about these penalties by checking out Sec. 9004 of the health care reform act.
Comments and Questions
Click to leave a CommentComment from buffy sweeton on October 31, 2010
Hey stupid- your HSA is Pre-tax wages. You get reimbursed for medical expenses wtih Pre-tax wages. That means you net pay 15-30% less. You can put $100 in an HSA and save money on medical expenses and ANY money saved is good. Why do you think rich people are rich? They are disciplined enough to plan, budget and make good financial decisions. Why do you think poor people are poor? They need two cars and an x-box and everything rich people have except of course- savings!
Comment from Richard Moore on October 29, 2010
Don Hill doesn’t know what he is talking about. I have money taken out of my paychecks for my HSA and don’t make a high salary. Don’t understand why Mr. Hill attacks people for making money and being successful.
Comment from E. Lowenstein on May 27, 2010
I like my HSA - it does take a lot of planning, but it means lower premiums and co-pays throughout the year.
Comment from Don Hill on May 22, 2010
Health Savings accounts are only for the wealthy/well to do people. The poorer and lower middle class people have no extra money to put into any account, especially a HSA. Most all these type programs are not for the average American. The rich are always looking for special ways to save the extra tax dollar, while the poor/middle class sre always just trying to keep their head above water, in the financial end of things.