The massive healthcare reform bill unveiled today by top House Democrats contains a couple of provisions that will impact those with Health Savings Accounts (HSAs).
Section 531 of the bill limits nontaxable reimbursements from Health Savings Accounts (HSAs) for drugs and medicines. After December 31, 2010, except for insulin, a prescription will be required in order for the purchase of drugs and medicines to be reimbursable. This change would also apply Flexible Spending Accounts (FSAs) and Health Reimbursement Arrangements (HRAs).
A second change that will impact HSAs is in Section 533. This provision will increase the penalty for nonqualified distributions from Health Savings Accounts from 10 percent to 20 percent. It will likewise apply to taxable years after December 31, 2010.
CNN reported that the House Democratic leadership is working to post the text of the final bill online early next week and has agreed to give members 72 hours to read it before a vote. Under that timetable, the House would begin debating the bill at the end of next week.