H.R.2667 - Flexible Savings Arrangements for a Healthy Robust America Act (119th Congress)
Summary
H.R.2667, the "Flexible Savings Arrangements for a Healthy Robust America Act," proposes amendments to the Internal Revenue Code of 1986. The bill aims to allow individuals to transfer funds from health flexible spending arrangements (FSAs) or health reimbursement arrangements (HRAs) directly into a health savings account (HSA) when establishing coverage under a high-deductible health plan. This would provide greater flexibility in managing healthcare savings.
The bill also includes provisions for reporting these qualified HSA distributions on W-2 forms. The changes would be effective for distributions made after December 31, 2025.
Expected Effects
The primary effect of this bill would be to increase the flexibility and portability of healthcare savings accounts. Individuals would have more control over their FSA and HRA funds, allowing them to move these funds into HSAs under specific conditions. This could encourage more people to adopt high-deductible health plans.
It would also simplify the process of transitioning between different types of health plans. The W-2 reporting requirement would enhance transparency and accountability.
Potential Benefits
- Increased Flexibility: Allows individuals to move funds from FSAs/HRAs to HSAs, providing more control over their healthcare savings.
- Encourages HSA Adoption: May incentivize individuals to choose high-deductible health plans, potentially lowering premiums.
- Simplified Transitions: Eases the transition between different health plan types.
- Enhanced Transparency: Requires reporting of qualified HSA distributions on W-2 forms.
- Potential Tax Advantages: HSAs offer tax advantages, such as tax-deductible contributions and tax-free withdrawals for qualified medical expenses.
Most Benefited Areas:
Potential Disadvantages
- Complexity: The rules governing these transfers could be complex and difficult for individuals to understand.
- Limited Applicability: The provisions only apply when establishing coverage under a high-deductible health plan after a significant period without such coverage.
- Potential for Confusion: Individuals may be confused about the eligibility requirements and limitations on qualified HSA distributions.
- Administrative Burden: Employers may face additional administrative burdens related to reporting qualified HSA distributions on W-2 forms.
- Impact on FSA/HRA Plans: May reduce the attractiveness of FSAs/HRAs if individuals prefer the flexibility of HSAs.
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution (Preamble), as it aims to improve healthcare access and flexibility for individuals. It does not appear to infringe upon any specific constitutional rights or limitations. The bill falls under the purview of Congress's power to tax and regulate commerce (Article I, Section 8), as it amends the Internal Revenue Code.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).