Serious Threat to HSA's


Super Genius
100+ Post Club
Any of you who are appointed with Assurant most likely got this message yesterday. It seems that the Democrats on the House Ways and Means Committee are trying to sabotage the whole HSA concept. This is so important especially for any of you who live in districts represented by a Democrat as this appears to be a party line issue. I would evengo so far as to forward some version of this to your clients, GA's, Sales Reps, preachers , rabbis, town gossips, doctors - basically anyone you know. Sorry for the long message but here goes:

[FONT=arial,helvetica]We must [FONT=arial,helvetica]stop a legislative effort afoot in Congress aimed at radically changing the way Health Savings Accounts (HSAs) operate. The Democrats on the U.S. House Ways & Means committee yesterday included a provision in HR 5719, the Taxpayer Assistance and Simplification Act that would require every single HSA disbursement be substantiated, similar to the way FSA disbursements are approved now by 2011. This language will provide great bureaucratic challenges to HSAs as we now know them and NAHU and our coalition partners are completely opposed to this measure. This language was included as to provide $308 million over 10 years in savings to the IRS to help them fund unrelated enforcement efforts. According to staff on the Joint Tax Committee (who scores tax provisions for the Congressional budget), the $308 million number was derived based on two factors:
1. The IRS will be collecting more penalties on HSAs; and
2. Contributions to HSAs will go down.
The Joint Tax staff declined to specify how much of the revenue raised would come from penalties for unsubstantiated withdrawals and how much would come from decreased contributions to HSAs. They did agree however that the HSA substantiation provision would have a significant impact on the HSA market. It is our understanding that neither the IRS nor the Treasury Department had even been consulted about the practical effects of this sort of legislative change.
[FONT=arial,helvetica]This language in HR 5719 is a very big threat to the viability of HSAs and is all happening very fast. The idea was just floated by the Democrats on Ways and Means last Friday afternoon, the Ways and Means Committee refused to eliminate the language on an almost party-line vote yesterday (Representative Porter of NV voted with the Democrats) and the full House will likely take up this bill in the next two weeks. Your quick and speedy participation in this effort is extremely important!

NAHU has created a sample email message (below my signature), for use in addressing your congressman. You may email your congressman by clicking here:
[FONT=arial,helvetica][FONT=arial,helvetica]Thank you in advance for your time and consideration and devotion to help protect the continued availability and growth of Health Savings Accounts.

Phil Ericksen, HIA, RHU, ARM​
Regional Sales Director - NC & SC​
Assurant Health​
900 Johnnie Dodds Blvd., Suite 120​
Mt. Pleasant, SC 29464​

Agent Services: 888-575-6421​
Agent Website:

Sample email message from NAHU:

As one of your constituents and a member of the National Association of Health Underwriters, I am writing to urge you to vote against HR 5719, the Taxpayer Assistance and Simplification Act when it comes to the House floor in the next few weeks. There is language included in this bill that would seek to require substantiation of Health Savings Account (HSA) withdrawal transactions and seek to radically change the current administration of HSAs.

As you know, HSAs are a dynamic, consumer-friendly and increasingly popular health insurance financing option for millions of Americans’ health care needs. Current law already requires individuals in tax-favored accounts to keep and supply receipts to the Internal Revenue Service when requested. It is the individual’s responsibility to keep good tax records – through self reporting – just as they do with charitable contributions and other tax deductions.

Imposing substantiation rules on HSAs (similar to those governing FSAs) would add an additional, unnecessary and nettlesome layer of bureaucracy that would retard HSA attractiveness for consumers.

Right now, 90 percent of HSA withdrawals are done electronically through a debit card, ATM, or checks. The same proportion (90 percent) of withdrawals from an FSA are done by paper/manually. Requiring substantiation of every single HSA transaction would bring HSAs back into the world of paper/manual transactions. It would take away from the customer experience. It also fails to recognize that HSAs and FSAs are inherently different products (though both are consumer driven) – FSAs are an employer provided product; HSAs are an individual product which need not be tied to an employer. They should not have to live under the same rules.

HSAs place significant responsibility with the account holder – which is an attraction for the beneficiary and the employer. Ironically, at a time when Congress is seeking to enhance the use of Health Information Technology to help reduce costs and improve quality, efforts to radically change the oversight and administration of HSAs in such a way would be a giant leap backwards.

As a professional health insurance producer who is on the ground every day working with individual and employer health needs, I have not heard or seen any credible evidence indicating that there is any real or perceived problem in this area with respect to fraud or abuse. If there are concerns in this area, perhaps Congress should confer with the IRS to discuss this further and exchange ideas for practical and desirable solutions. But requiring substantiation on HSA transactions is a bad idea that would lead to a significant decrease in electronic transactions, longer wait times for reimbursement for individuals, and higher administrative costs. I strongly urge you to vote against any public policy change in this area.

Thank you in advance for your time and consideration, and if I can serve as a resource to you or your staff on this or any other health care issue, please do not hesitate to call on me.
Why wouldn't HSA BANK be all over this alerting it's members and taking action? Wouldn't they essentially be put out of business?

Is this a REAL threat or is this just bad wording on the bill?
Why wouldn't HSA BANK be all over this alerting it's members and taking action? Wouldn't they essentially be put out of business?

No no you're misunderstanding.

It adds the administrative burden of checking every single reimbusement for justification.

I'm certainly NOT in favor of it, but it doesn't put anybody "out of business". It adds to the administrative cost - which of course will be passed on.
Last edited:
The fact that they have estimated how much it wopuld cost and where that money would come from tells me it is a little more than bad wording. One of those funding sources is nothing more than increased tax revenue from decreased hsa contributions. So they are proposing legislation to intentionally discourage people setting money aside for their health care. Use your imagination as to what the motivations may be.
HSA's are viewed as a tax dodge for the rich. In an election year, expect the Democrats (many of whom are independently wealthy themselves but derive their power from the working poor and uneducated) to beat the class warfare drum. By increasing regulation, and adding fees, it will force the rich to pay their "fair share".