The personalized health benefits category is poised for even greater growth as Congress considers two bills aimed at expanding certain benefits.
The House of Representatives passed H.R. 6199 and H.R. 6311, and now the bills head to the Senate for consideration.
The bills contain provisions that would expand how a person can contribute to and use a variety of personalized health benefits vehicles, including health savings accounts (HSAs), flexible spending accounts (FSAs), and health reimbursement arrangements (HRAs).
While the bills’ eventual passage is uncertain, their success so far is yet another move toward the personalization of health benefits—a decades-long shift leading to better benefits outcomes for small businesses and their employees.
In this post, we’ll examine the bills and their provisions in the context of the personalized benefits movement. We’ll also share how you can get involved, and where we believe health benefits are headed in the future.
What’s in the bills?
The House passed two bills in July: H.R. 6199, the Restoring Access to Medication and Modernizing Health Savings Accounts Act of 2018, and H.R. 6311, the Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Act of 2018.
Together, the bills would expand eligible expenses for personalized health benefits, relax rules on contribution, and allow for greater flexibility with an individual’s benefits funds.
We’ll break down the specific provisions in each category below.
Eligible expenses
- Over-the-counter medicines would no longer need a doctor’s note to qualify for tax-free reimbursement. This would expand eligible expenses for those participating in HSAs, FSAs, HRAs, and Archer medical savings accounts (MSAs).
- Menstrual care products would newly qualify as reimbursable medical expenses.
- Certain sports and fitness expenses, such as gym memberships, would be qualified medical expenses with a limit of $500 a year ($1,000 a year for families).
- Direct primary care service arrangement fees would be payable through HSAs with a limit of up to $150 a month ($300 a month for families).
- Certain eligible expenses incurred before the establishment of an HSA would be payable through the HSA.
Contribution guidelines
- HSA contribution limits in 2018 would increase to $6,650 for individuals and $13,300 for families.
- Spouses over age 55 would be allowed to make catch-up contributions to the same HSA.
- Individuals with bronze or catastrophic plans would be able to contribute to an HSA.
- Employees participating in Medicare Part A and covered by an HSA-qualified plan would be able to contribute to an HSA.
- Individuals with a spouse enrolled in a medical FSA would be allowed to contribute to an HSA.
- Individuals participating in direct primary care service arrangements would be able to contribute to an HSA.
Benefit funds
- Employees whose company terminates their FSA or HRA could convert those funds to HSA contributions, with a limit of $2,650 ($5,300 for families).
- Medical FSA balances could carry over to the following year, with a rollover limit of three times the annual FSA contribution limit.
What it means for personalized health benefits
The move away from traditional group benefits and toward personalized health benefits has been happening for some time.
In response to increasing costs and complexity associated with the old benefits model, both the public and private sectors began looking for a new way. They arrived at personalized health benefits—a way for businesses to give employees tax-free money for their health care needs.
The growth in popularity for personalized health benefits began with the HSA and FSA, quickly evolving into new vehicles like the HRA. As cost pressures increase and limitations on the traditional model grow, the market pushes further into personalized health benefits.
The provisions in H.R. 6199 and H.R. 6311 represent yet another step in that direction.
Businesses have responded positively to this ongoing change. With personalized health benefits, they have greater control over their budgets and their employees can choose the consumer services they want most.
Today, thousands of small businesses offer at least one personalized health benefit to their employees.
How to support the bills
H.R. 6199 and H.R. 6311 face a more uncertain battle in the Senate than they did in the House. Tracy Watts, a senior partner and the U.S. leader for health care reform at Mercer, called the Senate outlook for the bill “dim” due to budget pressures, though public support may make a difference.
If you would like to express support for the bills, contact your congressional representatives soon or work with business advocacy groups in Washington.
The future of personalized health benefits
Regardless of the outcome of these two bills, the shift toward personalized health benefits will continue. It was the subject of an October 2017 executive order, and policymakers are discussing it at the highest level.
By 2025, we at PeopleKeep believe personalized health benefits will be the primary way small businesses offer tax-free compensation to employees.
Those that adopt it now will be ahead of the curve. More importantly, though, they’ll be offering a uniquely valuable health benefits program—one that will give them a significant edge in hiring and keeping talented employees in the years to come. 
