Congress Improves HSAs

Before the 109th Congress headed home, it passed legislation to greatly improve the benefits of health savings accounts for both employers and employees. The Tax Relief and Health Care Act of 2006 makes several business- and employee-friendly changes to HSAs that increase the affordability and accessibility of health care for independent businesses.

Today's Tools & Tips article on NFIB.com gives an overview of the legislation, including the following highlights:

• Money from flexible spending accounts and health reimbursement accounts can be rolled over one time, penalty-free, into health savings accounts.


• There is no longer an annual plan deductible limitation on HSAs, meaning that in 2007, individuals will be able to contribute $2,850 to an HSA and families will be able to contribute up to $5,650, regardless of the size of their health insurance deductible.


• Allows people to fully fund their HSA account, regardless of when during the year they became covered under the plan.


• Employers may contribute more for lesser-compensated employees.


• Allows a one-time rollover from an IRA to a HSA.