Hatch bill would expand health savings accounts

The rest of the bill deals primarily with health savings accounts (HSAs) — tax-preferred accounts that can be used only for healthcare purchases. The healthcare reform law prohibits the use of HSAs to pay for over-the-counter drugs without a doctor’s prescription. Hatch’s proposal would lift that ban.

Even before healthcare reform took effect, money that people put into flexible spending accounts could not carry over from one year to the next. Under Hatch’s proposal, people could roll over $500 of their FSA savings.

Current law also doesn’t allow people to use HSAs to pay for insurance premiums unless they’re unemployed. Hatch would tweak that limitation so that an HSA could be used to buy long-term insurance and other “qualified policies.”

“This legislation will provide American workers and retirees with a common-sense way of improving access to quality, affordable healthcare,” Hatch said in a release. “These health plans empower Americans to take control of their health and well-being.”

— This post was updated at 12:20 p.m.