Healthcare reform legislation

A path to health and wealth security

House and Senate proposals would substantially increase the benefits available to users of HSAs

1Effective January 1, 2018

Enabling tax-free use of HSA funds to cover qualified medical expenses and save families thousands of dollars in over-the-counter medication costs.

2On average, US households spend $338 per year on OTC medications (IRI, 2015). Family with 2.4 children, 3 years apart. Assumes child is using HSA to pay for OTC medication until age 26. Assumes 30% tax rate. https://www.chpa.org/MarketStats.aspx

3Assumes a 30% average tax rate per http://thehill.com/policy/finance/238735-average-us-worker-pays-315-pct-tax-rate-report

4Based on a 2.5% inflation rate in the OTC calculation per http://www.tradingeconomics.com/united-states/consumer-price-index-cpi/forecast

These provisions will, if approved by Congress, create a new health care and retirement savings roadmap.

5Assumes 8% average annual return on annual maximum annual and catch-up contributions per the legislation

6Assumes a 30% average tax rate per http://thehill.com/policy/finance/238735-average-us-worker-pays-315-pct-tax-rate-report

MAX CONTRIBUTORS TODAY

The average individual that contributes the maximum to their HSA has an income of only $74,000 or 300% of the Federal Poverty Level (see map below). 45% are enrolled as individuals and 55% as families.

Map based on longitude (generated) and latitude (generated). Size shows sum of number of records. Details are shown for zip. The view is filtered on sum of number of records, which ranges from 1 to 894. Based on HealthEquity 2016 contribution data. NOTE 1: Per Federal Poverty Level HHS guidelines https://www.federalregister.gov/documents/2017/01/31/2017-02076/annual-update-of-the-hhs-poverty-guidelines

HSAs are never taxed at a federal income tax level when used appropriately for qualified medical expenses. Also, most states recognize HSA funds as tax-free with very few exceptions. Please consult a tax advisor regarding your state’s specific rules

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