Small Business Employee Benefits and HR Blog

How Health Care Insurance Reform Affects HSAs (Health Saving Accounts)

March 31, 2010

Yesterday, we talked about how health care reform affects flexible spending accounts (FSAs).

Beginning in 2011, new health care reform legislation will affect Health Savings Acccounts (HSAs) in the following ways:

  1. The tax penalty on distributions from HSAs not used for qualified medical expenses will be increased from 10% to 20%
  2. Non-prescribed over-the-counter drugs will no longer be qualified medical expenses

The health care reform bill makes no changes to how employers and employees make contributions to an HSA.


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