President Obama signed The Patient Protection and Affordable Care Act into law at a boisterous White House signing ceremony. Like it, or not, it has become the law of the land, and those still spending a lot of time and energy opposing the change might be better off thinking about how it will impact your opportunity to make a living.
Some experts are already predicting that it is time to bone up on consumer-directed health plans and health savings accounts (HSAs).
A recent Reuters article, cites industry experts who expect that many consumers who will be entering the health insurance market will opt for lower premium, high-deductible plans featuring HSAs.
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While the more prevalent flexible spending accounts (FSAs) will take a bit of hit in 2013 when a $2,500 annual cap (indexed for inflation) comes into play, HSAs have come through the process pretty much in one piece.
Two changes will impact HSAs:
- Effective Jan. 1, 2011, tax free HSA dollars may no longer be used to purchase over-the-counter drugs not prescribed by a doctor. (This change also impacts FSAs and HRAs.)
- Effective Jan. 1, 2011, the tax on HSA distributions that are not used for qualified medical expenses will increase to 20 percent from 10 percent.
Republicans first backed HSAs as a way to make individuals more aware of medical costs. Now many Democrats are saying they support the principles of HSAs. President Obama even mentioned them in a March 2 letter to Republican lawmakers, when he offered rules to promote more high-deductible plans.
So, if you have been slow to add consumer-directed health plans to your portfolio, this might be the time to get on board the wagon.
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