By coinnews 
00:00 Brad
Health savings accounts could get a big boost under President Trump’s tax package. The legislation passed by the House now heads to the Senate for consideration. Here with more, we’ve got Yahoo Finance senior columnist, Carrie Hannon. Carrie, there are a ton of changes to HSAs under this legislation, but let’s start with the big one, increased contribution limits. What are we seeing there?
00:37 Carrie Hannon
Yeah, Brad, absolutely right. This is one sort of glimmer in this bill that I think is worth noting is they’re talking about doubling the annual contribution that people can make into these health savings accounts. And so it would go to $8,600 for individuals and $17,100 for joint or family plans. This is a huge jump of what people can set aside. Now, again, just as a reminder, these health savings accounts, these HSAs are for people that have high deductible health care plans. So what that means is this year, if you’re an individual, your deductible would be $1,650 or if you’re family plan, it would be $3,300. So just understand who we’re talking about. Now, quickly, I just want to say why I absolutely love HSAs, and many financial planners say this is a terrific retirement tool for people if they focus on using saving in these accounts for the long-term medical costs for the future instead of using them for the immediate costs, which is what most people do. What these accounts have, Brad, are the triple tax advantage. No other accounts is like this. You don’t pay tax going in with the money, you don’t pay tax on how the how the money grows in these accounts, nor do you pay tax when that money comes out if it’s for a qualified medical expense. So this is something that, unfortunately, a lot of people don’t pay attention or don’t understand the investment aspect of these accounts, and also a small percentage of people really are taking advantage of all of this because they’re not even putting the full amount they have today because they’re concerned about paying, you know, they’re saving and paying for many other things in their life. So, uh, it’s just one thing that that I think this is a bright light if people can put more aside in these accounts.
03:42 Brad
There’s also a bit more flexibility for married couples under the bill. What does this entail exactly?
03:49 Carrie Hannon
Right, Brad. So, uh, there’s lots of other little pieces to this. One is that for married couples, um, right now, if you have a flexible spending account, one spouse has, the other one has an HSA, you can’t contribute to both. So you have to select one to do. Uh, now, this will open this up that you’ll be allowed. Spouses can do both plans, uh, if one has one, one has the other. The other thing is that it will allow people to, uh, combine them in one health savings account, both spouses, uh, their contributions and their catch-ups. And this gives it a bigger oomph in terms of if you’re using it as an investment account. But, Brad, there are some other fun things in there as well, like, for example, you’ll be able to use these accounts for many gym memberships, which is something that you they consider that now a qual or they would consider it a qualified medical expense, uh, or if, uh, you have one of these concierge medical plans where you pay an annual fee, they’re going to let some of those be considered qualified costs as well. So, and they’ve expanded the kinds of plans that can offer health savings accounts. So I think we’re seeing some more movement to kind of give some juice to these HSAs, and hopefully it can be helpful for many people saving for retirement and saving for today’s medical costs.
05:50 Brad
Carrie, great breakdown as always. Thanks so much.
05:54 Carrie Hannon
Thanks, Brad.