The provisions in the PPACA that affect HSAs as of January 1, 2011, will this be a move going forward or will it be a rule that could force changes in existing accounts?
First, let’s review what has not changed for 2011. The Internal Revenue Department released IRS Procedure 2010-22 (http://www.irs.gov/pub/irs-drop/rp-10-22.pdf) on 24 May 2010 which stated that the maximum contribution amounts for 2011 are unchanged from 2010 and remain at $3,050 for a single individual and $6,150 for a family.
The catch-up contribution of $1,000 for those aged 55 and older also remains the same. The deductibles and out of pocket maximum high deductible health insurance policies that are purchased in conjunction with an HSA that allow the account holder to deposit and invest funds that can be withdrawn and used for allowed health care expenses.
The minimum deductible for 2011 for a HDHP remains unchanged at $1,200 for self-only coverage and $2,400 for family coverage. The 2011 maximum out-of-pocket for HDHPs remains unchanged at $5,950/$11,900 for self/family coverage. The roll-over provision for HSAs remains in place. Funds not spent in 2010 in an HSA can be retained in the HAS for 2011. So what has changed? Starting in 2011, over-the-counter drugs will no longer be allowed to be paid via an HSA. The only drugs that will be included as covered drugs will be insulin and prescription drugs. This change does not affect the ability to use an HSA to pay for other health care expenses such as medical devices, eye glasses, contact lenses, co-pays and deductibles.
Now, to the question at hand, the Health and Human Services website at (http://www.healthcare.gov/law/provisions/fsa_hra/index.html) provides the following “Beginning January 1, 2011, the costs of over-the-counter medications will be reimbursed under a Flexible Spending Account (FSA) or Health Reimbursement Account (HRA) only if the medications are purchased with a doctor’s prescription.” Based upon that statement, in which there is no exclusion for existing HSAs, the answer to the question appears to be that the change is effective for all HSAs, not just those initiated on or after 1 Jan 2011. Any existing HSA will have to comply with the change effective on 1 Jan 2011.