The Market Impact of Expanded HSA Eligibility: Webinar Recap and Replay

Learn from our panel as they discuss the proposed expanded eligibility for HSAs.

On January 24th, First Dollar hosted a virtual panel of HSA experts to discuss the market impact of proposed legislation expanding HSA eligibility.  Our panel of HSA experts included:

  • Becky Seefeldt, VP of Strategy at Benefit Resource, LLC
  • Bill Sweetnam, Legislative and Technical Director at ECFC
  • Jason Bornhorst, CEO & Co-founder of First Dollar
  • Roy Ramthun, Founder and President of HSA Consulting Services, LLC
  • Josh Hostetler (moderator), Senior Content Strategist at First Dollar

Did you miss our webinar? Fortunately, we have several options for you to catch up on our discussion.

Webinar recording

Please enjoy the video linked below. (Note: The brief sound interference at the beginning ends after the panel introduction.)

Research report

We also released "The Market Impact of Expanded HSA Eligibility" during the webinar. To read through our complete report, you can download it here.

Webinar transcript

Below is a written transcript from our recorded webinar, organized by the questions posed to the panel.

Why was the HSA created with its eligibility restrictions?

Bill Sweetnam: Well, the main thing that you should remember when we're talking about an HSA, is that it's really a triple tax benefit. You get a contribution deduction, the amounts that are in there are tax-free, and when amounts are taken out for a qualified medical expense, that's tax-free too. So for Congress to allow that sort of a major tax benefit, they wanted to make sure that it was only limited to certain types of people. Before the HSA was enacted, there was something called, the Medical Savings Account, currently called the Archer Medical Savings Account, which had a lot more limits. When HSAs were initially enacted, there were a lot more limits on who could make contributions, and the amounts of contributions. And over the years, Congress has seen the benefits of HSAs, and has noted that a lot of people want to contribute to HSAs, and have relaxed a lot of the requirements. Particularly the requirements in terms of contributions and how much you can contribute. But the big thing is that, as you have on your screen here, there were some things that you must meet in order to be able to contribute to an HSA. And I think one of the issues that is really interesting, is the fact that you have to be covered by that high-deductible health plan, and really have no coverage below that high-deductible amount. So those particular dollar amounts mean a lot in the HSA world. So I'll stop there and turned it over to Roy.

Roy Ramthun: Yeah, thanks Bill. We have to remember the time at which HSAs were created. This was during the heyday of HMOs, and there were a lot of concerns at that time about the restrictions that HMOs had placed on people accessing benefits that were covered under their plan. So there was pressure though at the same time to make sure that these policies were real insurance. That's why you see annual limits on out-of-pocket expenses. And I think one of the first innovations that these policies brought to the market, was the notion of a combined deductible between medical and pharmacy. And then secondly, an annual limit on out-of-pocket expenses that also applied to both the medical and the pharmacy side. You don't have to go back that far, but most people have forgotten that most pharmacy benefits were provided as sort of a rider. They had their own schedule of benefits, many of which had no annual limit on out-of-pocket expenses. Now they do, under these plans. And in fact, when the Affordable Care Act was created about 10 years after HSAs came to the world, that became a requirement that now applies to all insurance plans. So HSAs were a pioneer.

Now HSA qualified plans are the only plans that require a minimum deductible, but that deductible does not apply to preventive care. So again, this addressed a concern about, well, if people delay getting care that they need or should have, and then get sick because they didn't take advantage of those things.

We want to make sure that there's no financial disincentive for people to avoid going to the doctor to get their annual physicals, their wellness checkups, screenings for various diseases, immunizations. And other things that we all think can help people stay healthy, and hopefully detect diseases early and avoid them from progressing to a point where now we know we're going to have expensive healthcare costs.

That minimum deductible is not a requirement of any other plan in any law that I'm aware of. If it's an HSA-qualified plan, it obviously must meet these minimum deductible requirements. And interestingly, now it seems like every health plan has some kind of a high deductible to it.

I understand what is high and what is not may be in the eye of the beholder. There are certain specific minimums, as you can see on this slide, that have to apply to HSA-qualified plans, but don't necessarily apply to other plans that people consider to have a high deductible.

So these are things that are important facts that people need to understand that, if you want to be eligible to contribute to an HSA, your plan must meet these requirements. And then there are finer details, which we won't go into right now.

Frankly it's a lot easier for me, and Bill too, to tell you whether a plan is not HSA-qualified because of some red-flag provision in the policy. It's not always as easy for us to tell you that the plan is HSA qualified.

It may look like it meets all the requirements, but there may also be another provision in the policy that we're not aware of, which could lead to it being disqualified. And therefore one loses their ability to contribute to their health savings.

Bill Sweetnam: And in addition, you may have other coverage below that deductible amount which would make you ineligible. So this whole idea of eligibility is exceptionally complex.

And while you may look at the insurance policy, like Roy was saying, but you may find that you have some other coverage from your employer below the deductible that may make you ineligible. So a lot of the questions that I get is, what sort of coverage that the employer provides would make someone ineligible to contribute to an HSA.

Roy Ramthun: And the number one question I get is about Medicare, as you have in the first bullet. We won't go into that right now, but who knew that Medicare's rules were so complex until HSAs came along?

Josh Hostetler: Amazing backdrop. And I'm going to move on to our next slide, for showing what the current market looks like today with these restrictions. And this visual was made by our design team. We really looked at the research that was done by others, including Devenir.

This one right here shows that 20% of Americans were covered by an HSA in 2021, with these current restrictions. So about one in five Americans. And cover refers to anyone with access to the funds, including account holders, including eligible spouses and eligible dependents.

Even with these restrictions, the HSA is increasingly popular. Becky, what do do you hear from clients on why they're choosing HSAs?

Becky Seefeldt: So I think it's easy for employers to see at the front end some of the key advantages of HSAs. The fact that they roll over, they earn interest, they can be invested. But oftentimes they're really focused on the health insurance first, and that's kind of the first piece of their puzzle when they're looking at the overall benefits equation, and what they're going to offer their employees.

And then, as they look at that, they want to say, "Okay, well, what am I going to do to offer the most rich benefit? But also considering how are people going to pay for out-of-pocket medical expenses? What other considerations? Are people coming from other employers, and they have this expectation of the HSA?"

They're really kind of piecing it all together. And many times the answer isn't, "Okay, we're going to do a full replacement HSA." It's actually a fairly rare situation where an employer will say, "I'm going HSA only."

Most will offer more than one health insurance. And we've even seen, and even in our own case, where employers may offer the qualifying high-deductible health plan as their only plan offering, but still give employees the choice when it comes to the funding of the accounts, and the benefits that they want. The HSA has lots of advantages, but for certain people it may not work.

An FSA has the advantage of universal coverage. So on day one, you have access to that full election amount. Versus HSA's a cash balance account, and it requires the funds to actually be there. We've found that some participants just need that security of having that full election available to pay for prescriptions and other things that the HSA isn't currently providing.

So HSAs are absolutely wonderful for many reasons, and I could go on about all of the things. But you do have to think about it in the full perspective of, there's lots of different needs that employers have, and they're trying to weigh all of those needs, how their overall benefits package comes together.

And eligibility is one of the factors on why some people can't participate in the HSA and may choose others. But there may be other reasons as well. So it's kind of keeping the full picture, and trying to come up with that most attractive benefits offering they can.

Josh Hostetler: Thank you so much for sharing. In the interest of time, I'm just going to the next slide, 'cause I want to really get into the meat of our discussion.

The next one is about the proposed legislation. There were a lot of different legislation that was proposed in the last Congress, legislation that came from both parties and both houses. Three that I want to highlight here is, one is for the Health Savings for Seniors Act, which would have made it possible for Medicare beneficiaries to contribute to an HSA.

Child Health Savings Account. Just like you can have a college fund for your kids, you could have had a savings account for kids to save for healthcare accounts. And the third one, which was one that would've made the decoupling of the high-deductible health plan, so that everyone can contribute to an HSA, no matter what kind of health plan they have.

Does any of the proposed legislation have more momentum than others?

Bill Sweetnam: Well, the first bill, the Health Savings for Seniors Act, one of the co-sponsors is a Representative Jason Smith, the Republican from Missouri, and he was just elected to be the chairman of the House Ways and Means Committee. And the Ways and Means Committee is the tax writing committee in the House of Representatives.

So the fact that he's a co-sponsor of this bill, and it's a bipartisan bill, sort of makes me think that this is... Number one, we have the chairman of the committee, the tax writing committee in the House, is in favor of expanding HSA eligibility.

Number two, whenever a health bill comes through the tax committee, you would think that a co-sponsor of a bill would want to have that one move forward too. Or maybe he wants to do some committee hearings on this issue because he's interested in it. And three, the fact that it is a bipartisan bill may be very helpful.

The funny thing is that I have heard some of my Republican friends in Washington say, "Well, the other thing that they could do is bring up this bill that at least a couple of Democrats are for, and try to split the Democrats on a bill like this."

That's great I think in the House side. And the question is always what is going to happen on the Senate side. While our thoughts have been that Democrats in the Senate are not against health savings accounts, it's not one of their lead provisions that they think about.

We could see a bill like this come through, and maybe get hooked onto some sort of a small health bill that runs through the two tax committees. So I would say that of the three bills, that's the one that's probably going to have the biggest chance.

I think the Health Savings Account Expansion Act of 2021 has less of a chance. Number one, the sponsor of that bill, Senator Sasse, is no longer in the Senate. He's moved down to Florida, and he's now the president of one of the Florida universities. So you don't have somebody that is pushing it as much as you did before.

The second is that I would imagine the cost of a bill like this is very big. We're in a period, and you're probably seeing a lot of discussion about government spending, and trying to rein back on government spending. Well this would be a big government spending bill. It would be a big tax savings.

And so I would think that that probably makes it a little less likely to move forward. I don't know whether Roy has any good political instincts on who might pick this bill up now that the senator is gone. But I guess I sort of think that this one's on the low end of probability.

Roy Ramthun: Well we definitely will be looking for recruits. It is obviously a challenging environment, and as Bill said, the Senate is now completely controlled by the Democrats. So unless you can get a bunch of Democrats to be involved in sponsoring the bill to make it bipartisan, it will have a hard time moving through the Senate.

As Bill suggested, a bill that came over from the House, especially if it's bipartisan, would have a much better chance of getting through the Senate. Maybe not as a standalone bill, but possibly as a provision in a larger package, as we seem to see is the way that things get done these days.

Witness the inflation Reduction Act last fall, the ARPA Act at the beginning of 2021. So that's the way Washington works these days, for better or worse. You have to go with it.

Bill Sweetnam: Just to give my two cents on the Child Health Savings Account bill. I think one of the things that we know about Representative Smith as the chairman, is that he has talked a lot about the Child Tax Credit.

So you could see some sort of looking at tax issues dealing with children. And so you could see this get picked up at some point, when they do look at tax provisions that deal with children and providing benefits for children and that.

I don't see as clear of a path forward on the Child Health Savings Account Act. But I do see that there is interest in looking at the tax provisions dealing with children. So this might be something that gets pulled up in that regard.

Roy Ramthun:,The last thing that I'll just quickly add is anything that's incremental has a much greater chance of passing, than something that makes larger changes. So when you look at these bills, I agree with Bill that HR 7438, whatever the number is there, I can't exactly read it, would have a much greater chance of passing than the other two.

Josh Hostetler:Just want to add real quickly that the Senator Ben Sasse has actually become the president of my alma mater. So go Gators, University of Florida.

As a TPA, how are you and your team thinking or preparing  for this potential legislation change?

Becky Seefeldt: So we are very active with ECFC, and that's one of our avenues to really help to educate Congress on some of these issues, and to educate them on ways that they can incrementally improve some of these benefits.

But eligibility in itself, there's a number of facets there. There's the seniors, there's issues with Veteran Affairs and CHIP programs, and minimum benefits that people are receiving, that all could provide some of those incremental pathways to make them easier to use and make them more accessible for people. So that's one avenue that we're doing.

As an organization, we kind of see HSAs as the next big wave, and we've invested and partnered with First Dollar to improve our product. Because we wanted to make sure that our HSA solution was on the same footing as all of the other solutions that we were providing. Because we do see that as a critical component to the future of consumer-driven benefits.

Josh Hostetler: Thank you. Going on to the next screen, so who's currently ineligible. Going to quickly try, going to explain our math. And this is a very, very conservative estimate.

In our report that we're releasing today, we looked at how many people are currently ineligible. And to do the math, counted up everyone who receives insurance from government healthcare or is uninsured, because they're automatically ineligible.

We also looked at the Kaiser Benefits Survey, where they found that 25% of employees who receive... Or sorry, 26% of employees who received benefits in 2021, that they were enrolled in a HSA-qualified, high-deductible health plan. And then we applied that number to employer-provided healthcare.

Then we made a very, in terms of the number, generous assumption that everyone who receives healthcare from non-group plans, that they are in a high-deductible health plan. That's probably not accurate, but just used that to give a visual for us to know. And that's how we found over 270 million people in the US are currently ineligible, due to their current healthcare plan. 

What (if any) lobbying is fighting against legislation to expand HSA eligibility?

Bill Sweetnam: Well I think the big thing is, you have two issues here. One is the cost of expanding eligibility. So the revenue that would be lost to expand eligibility would be big. So really, you're making a choice as to where you want to spend tax dollars.

The people that would be fighting this would be people that would say, "You know what? I want the choice for the spending on healthcare to go for, let's say, Medicare for All. Or for expanding the Affordable Care Act and the subsidies under the Affordable Care Act."

So really the big issue is always going to be, you have additional dollars, tax dollars, that you're going to spend on healthcare. Do you want to have those additional dollars go for allowing people to make more contributions to an HSA? Or do you want to have those dollars go to providing benefits, expanding benefits under Medicare for All or subsidies?

The question is always going to be, and the people that are always going to be pushing against HSA expansion, are going to be the ones that are going to say, "You know, the additional tax benefit there is really going to go for highly-compensated people. And you're not providing benefits to lower-paid people who need it more."

And so that's going to be the discussion against any of these rules is, really, is this going to help the lower-paid people who have the most insecurity with regard to having health insurance benefits? And is this the best way for us to spend tax dollars? So I think that's the thing that we really have to be able to answer and address.

Roy Ramthun: The flip side of that is, the number of people covered by government-based healthcare has grown dramatically over the last 10, 20 years. People forget that the Affordable Care Act, one of the biggest reasons why the number of uninsured has gone down, is because of expanded coverage under Medicaid.

So you know have really choices for Congress to make about where its dollars are spent. Are they spent on privately-insured people? Are they spent on publicly-insured people? And this is a age-old debate that we've been facing since really Medicare and Medicaid were created.

Bill Sweetnam: Remember one of the big debates, and one of the reasons that we have HSAs, is that they were done at the same time as the expansion of Medicare Part D. They were part of the same package, and including HSAs was the reason that many Republicans decided to vote for that bill.

That's why Roy and I were sort of sent down to the House of Representatives to talk about HSAs. Because they wanted to have the Medicare prescription drug plan, but they also wanted to have HSAs. And they're part and parcel. You don't have one without the other.

Josh Hostetler: This discussion kind of reminds me, in a much more micro way, of discussions I have with my fiancé about budget. If you say yes to something, we have to say no to something else. So it's in terms of prioritizing work.

Moving on to this next question, which is about who could potentially benefit from expanded eligibility? This is a visual that we put in the report, just as a helpful way of looking at it.

Everyone, no matter what kind of healthcare plan you have, you are spending money on healthcare as we've talked about earlier. And anyone who is paying taxes, also can benefit from the tax advantages that are provided by an HSA.

So this visual right here shows the number of accounts. And I just want to make a quick, obviously important distinction, that the number of accounts does not equal the number of account holders. Someone could have more than one HSA.

But just as a way of visualizing that, in 2019, and we used that number because that's the most recent taxpayer data from the IRS, there were 148.2 million taxpayers, but there were 28.3 million HSAs. So under those restrictions, that's how many HSAs existed.

And just a way of visualizing that, if all taxpayers were able to take advantage of an HSA, how much the market could potentially grow. 

As you think about eligibility expanding, which sectors of the market do you think will experience the greatest growth?

Jason Bornhorst: Definitely. Thank you, Josh. And so before we jump into the HSA at a micro level, I think it's useful to ground the discussion a little bit in just some macro trends we're observing at First Dollar.

First, lovely policy discussion, but I think it's useful to, let's reground it for the consumer. Healthcare in the US is expensive. Whether you're looking at in the form of out-of-pocket costs with high-deductible, or just to a really premium plan with a high premium.

I think I saw a stat somewhere, it's something like $300,000 of total out-of-pocket cost for the average American over a lifetime. And so this is an issue impacting everyday Americans, and an issue worth discussing from a policy standpoint and a benefit standpoint. So just wanted to anchor there.

Secondly, I would just say, we're observing a proliferation of benefit expansion. Whether you're talking about HSAs, FSAs, HRAs, or any of the acronyms. Even non-taxable accounts, whether that be a lifestyle account, or just even a peer rewards program. In fact, I don't think there's an employer or a health plan in the country above a certain level that's not distributing at least one of those acronyms today.

And it's interesting, if you pop onto any Medicare Advantage user acquisition website, it's really discussing almost nothing about the plan design, which is largely quite commoditized from MA plan to MA plan. But it's really everything about the value-added benefits that promote that plan. Be it $1,000 a month for healthy groceries, over-the-counter medication reimbursement, or just even a peer rewards program for making appropriate choices within a preferred network.

And when you get down and actually talk to consumers about why they selected that employer, why they took that job offer, why they picked that health plan, et cetera, these benefits actually come up often as reasons why people are excited about those plans. Because from a consumer's perspective, one of the challenges is you're looking at what? Somewhere between $5,000 and $15,000 a year in premium for benefits that you may not even access.

Whereas these spending benefits, be it an HSA or other types, are real, near, and present value from a consumer standpoint. So let's jump into the HSA.

Ultimately, I think the HSA is the tip of what is a larger trend that is good for the employer and the health plan. Benefits like HSA, I think really effectively align appropriate healthcare consumerism. It encourages people to think twice about those medical expenses, encourages them to do a little bit of shopping.

And this has been the Holy Grail promise for years, but I would argue on the ground it's actually starting to happen. I can walk into a Walmart today, and there's 50 types of care for $79 or less that are honestly pretty damn good. And I can pay for those out-of-pocket, be serviced that day, and probably have a better outcome compared to other options available to me.

As I survey consumers, increasingly something like 10-20% of their annual healthcare spend is now starting to actually occur out-of-pocket, because they're finding that the preferred options are in fact out-of-network and they're just paying for them out-of-pocket. So just good trends and things I think to double-click on.

What markets do, I think, will accelerate if HSA is ultimately expanded. I think there's three in particular. The first is going to be health plans first and foremost. I'm predominantly thinking about Medicare Advantage here, but I think this equally applies to all of the commercial payer entities.

What health plans ultimately have is eyeballs, so they have an existing captive audience. Josh, you talked about the 280 million Americans that are currently ineligible for an HSA. A good chunk of those guys are actively enrolled in a health plan, they've just had any myriad of reasons why they haven't been able to access an HSA, as we discussed previously.

And I think Medicare Advantage is chief among them. I think as an MA plan seeks to wrap a member with all the services they need to effectively navigate healthcare in their later years, I think pushing an HSA onto those folks is going to be objective number one. Give those guys the tools they need to effectively save 20-30% on healthcare cost as they navigate their out-of-pocket portion of any of those expenses.

So health plans first and foremost. Secondly, I think financial institutions will also see a big boon to demand if the HSA for All ultimately comes to pass. This is also because of the distribution reason. If you think of all the Americans in the US, I think a good chunk of them are probably distributed amongst a handful of banks already managing a number of other accounts relative to their life, be it checking, savings, IRA, 401(k), et cetera.

I think it is a very likely outcome that if HSA for All passes, you'll see all of the major banks, and regional ones too, come to market with retail HSAs as quickly as possible. I've ultimately thought that, "Hey, wouldn't it be really cool if the HSA just lived inside of my Chase account," for example?

Why can't this just be a part of how I manage my day-to-day finances? And if I go out and swipe a card, and it's HSA eligible, just make it work. I think banks are actually very well positioned, given the uptake of the mobile strategies, to exploit this opportunity.

And then lastly would just be TPAs. Josh, as you had articulated, we are going to see an explosion of employer uptake in the event that the HSA for All bill or bills passes. In a typical employer today, you might have something like 20% of employees ultimately being HSA eligible.

I would anticipate that number will rise to almost a 100%. Every amount of those employees that are covered under some health plan then also being able to contribute to an HSA. And I anticipate that that will have a very strong knock-on effect for TPAs themselves, the sort of predominant players servicing those employer needs.

Josh Hostetler: Thanks, Jason. And maybe piggybacking a little bit off of what Jason just shared about the changing of healthcare, Becky, I'd like to turn to you. How would expanded eligibility change the way we think about healthcare? How do you see that changing the way that Americans use their healthcare and how they view it?

Becky Seefeldt: Well I think eligibility right now is a barrier, and it becomes a detractor. Because we spend so much time trying to educate people on all the different nuances that will make them ineligible or eligible. And just being able to simplify the discussion and say, "You have insurance? Great. You can have an HSA." And make it as simple as that.

I don't know if I'm quite on the train of, just let everybody put a pot of money away and not have any insurance underlying there. But I think that there is some potential to just simplify the discussion, so they can focus on the care.

Instead of the nuance of, how do I fund it? And which acronym, which different funding mechanism do I have? And really focus on, how am I paying for my prescriptions? How am I getting my child's ear infection taken care of? Or how am I making sure that my condition is in check?

We've always focused on the insurance, but it's about the people and their lives and the situations that really matter. And I think eligibility, and improving the eligibility and the access, just helps to simplify that conversation, and helps people focus on what matters. If that makes any sense.

Jason Bornhorst: Yeah, and I would quickly just expand on that, Becky. I totally agree. I mean, this group and the audience here, we spend all day long talking about the benefit types. They are insanely interesting as you actually get into the details.

But the common consumer does not care. They just want to swipe a card and buy healthcare. And I think that is the unfulfilled promise of our industry is, you can crank out benefit types until you're blue in the face, but ultimately you've got to make it simple for the consumer to just put money away for retirement, buy healthcare for their family when they need it. Feel comfortable with the choices they've made relative to benefits and health insurance. Full stop.

And that's one of the reasons why I think HSA for All expanded eligibility is so good. It's drastically simplifying what has been a relatively complex acronym soup, if I may.

Becky Seefeldt: Now if you ask me my opinion if I think it will pass, that's a different answer. But I do think that the opportunity to simplify would change the dynamic.

But I do think that right now, where we stand, I don't personally think HSA for All is going to pass anytime soon. But if we could just chip away at some of those nuances, and simplify it kind of incrementally, I think there's some opportunity there.

Bill Sweetnam: The unfortunate thing is that, these are all provisions of the Internal Revenue Code. And has anybody ever thought that the tax code was simple or well organized? No one except a few tax lawyers.

So I think that's one of the problems that poor people like Becky have to deal with, in that she's trying to take really tough tax concepts and make them understandable to real people who, as Jason said, just want to swipe a card.

Well, there's so much behind that, and it would be great in order to remove all of those tentacles. But again, we're dealing with the Internal Revenue Code, and it's incredibly complicated. And heck, I was one of the guys that wrote the regs trying to deal with a lot of that complications over the years.

Josh Hostetler: Yeah, I love the term... I don't love the concept, I love the term acronym soup. We recently did a partnership with Hospitalogy, and he referred to that often. I want to quickly jump into this screen to talk about what are some of our predictions are, because there's some really good questions coming from the audience that I'd like to direct to the panel from there.

So here are six predictions that we have from our report. If there was expanding universal eligibility, which most people say is probably unlikely, but if it happened, what we think would occur. So one, because FSAs have a "use it or lose it" component, it probably wouldn't make much sense for FSAs to survive, or they won't do as well with HSAs having universal eligibility.

Two, we think that all benefit providers would need to offer an HSA. Currently, if you're a health plan who only does Medicare Advantage plans, it probably doesn't make much sense for you to offer an HSA to your customers.

Three, we think the employer market would probably grow the quickest, because employees wouldn't have to choose between a high-deductible health plan to have an HSA. Four, HSAs will become the new wealth-building tool, as a comparison to a 401(k), which is tied to your employer. People can own their account and still invest with an HSA.

Five, all benefit providers without an HSA product will be at a disadvantage. If your competitor is benefiting from net interest margins of an HSA, you're going to lose out if you don't have the same offering. And then six, that people who are traditional HSA providers, or prepared, will be at an advantage.

And so quickly ramble through that those quick, because I wanted to get to these couple of questions in our remaining eight minutes.

Would wider access to HSAs lead to a decrease of the adoption of HDHP?" 

Jason Bornhorst: I do think so. I'd be curious to have Bill and Roy weigh in. But my hypothesis is many of the high-deductible plan designs are chosen precisely to access the HSA itself, even though that plan is actually not particularly optimal for that family's healthcare situation.

And so if you could just decouple them, I think you might actually find that high-deductible adoption itself goes down. But these days almost every plan a HDHP, so it's sort of hard to say. I don't know if Roy or Bill went weigh in.

Bill Sweetnam: I think one thing that you would have to sort of think about is, if you do with these bills that would do universal HSAs and allow people to make HSA contributions without having a high-deductible health plan, you're going to need to change a lot with the Affordable Care Act.

Because remember, the Affordable Care Act required people to have coverage, and required employers to provide coverage. So one of the things that I think that might be a way out of this thicket is that you could do something where you can make a HSA contribution if you have ACA-compliant coverage. And which, as we look, so much of that is close to a high-deductible coverage. So that might be a way around the ACA problem.

I don't think that right now you would have too much luck in a Democratic-led House to repeal or cut back on the Affordable Care Act. And the last time that the Republicans had control of the House, they weren't able to do that either. So that will be an interesting way to look at getting rid of the idea of the high-deductible health plan.

Roy Ramthun: Yeah, I actually see it differently than you do, Jason. I think more people could end up in so-called high-deductible health plans. Maybe not what we know them as today.

But today, a high-deductible health plan is a trade-off between, pay more in premium or pay more out-of-pocket later. If I now can qualify for an HSA to pay for my out-of-pocket later, and I get to keep the money, I might actually choose a plan with a higher deductible than I currently have, but maybe other features that that high-deductible plan is offering that can't be offered today in the current more rigid structure.

And so I've got that account available to help me pay for those expenses, but a lot of people don't have that opportunity today. So it would be very interesting to see how the market would play out if that were the case.

Bill Sweetnam: To echo what Roy... I agree with Roy. And one of the things that you could see is, you could see that employers could provide other sorts of medical services below the deductible, but still have high-deductible plans, and that would be a great thing.

I mean right now we're wrestling with telehealth for free. And we have a legislative provision for two years that says that that's okay, and you can make a contribution to an HSA. But after that leaves, you might like to see some sort of a world where you have a high-deductible health plan, but the employer can make some changes to that high-deductible health plan and provide benefits below the deductible.

Lots of questions about, we spent so much time when I was at Treasury dealing with preventive care. It'd be really nice not to have to deal with all of those questions about preventive care. So it would be a really good world out there with a little bit looser determination of what's a high-deductible plan.

Josh Hostetler: I'm seeing the clock. It's ticking down. So I want to quick try and make time for one more quick, just open question for the panel in the last two minutes we have.

Are there any other predictions regarding the impact of expanded HSA eligibility that the panel would like to share?

Jason Bornhorst: I'll take a stab at that, which is beyond HSA for All, and I do think there's a number of threads going that this will one day happen. I haven't really known the government to take benefits away, only to slowly but surely incrementally expand. And so I do think we will expect to march there.

But I would just say, whether you're a health plan, a TPA, financial institutions or whatever, the benefit expansion is happening. Whether it's HSA or any other type, year over year it is expanding. Your competitors are taking note. And so I would encourage folks to start to clue in and check this out.

Do you think there's an opportunity to distribute this kind of stuff? Can that be a business-builder for your company? How might you go about it? Are you going to build in-house, or are you going to identify a platform? I think these are worthy discussions to be having, whether HSA for All comes to be.

Roy Ramthun: My prediction is the cost of healthcare will continue to rise, and that's going to drive what all these solutions end up for. And so, whether it's FSA, HSA, HRA, I think it's going to have to be a combination of probably all of them. There's going to be enough opportunity for everybody to stay in business if these kinds of accounts are there to help people pay for those out-of-pocket costs with tax-free dollars.

Employers are going to, if given the tools to do so, will figure out what is the best combination of those programs that work for their employees. And then hopefully have the flexibility to sort of fill in gaps where they think are necessary to really make these benefits provide the most value to their employees.

Josh Hostetler: I think the rise of cost increasing is probably a very true prediction to make. I just want to close up the panel by saying thank you so much to the panel for your time. I really appreciate everyone's expertise and willingness to engage in the conversation. In the comments I just shared our report that we just made. If you like the discussion we're having here and some of the visuals we've made, please reach out and download the report there. I just thank you so much for the attendees and panelists time for your time here.

Josh Hostetler

Josh leads content for First Dollar, a fintech company that builds infrastructure for health spending benefits. Before First Dollar, Josh led course creation at Aceable, taught First Grade, waited tables at Olive Garden, and wore many other hats. He misses the breadsticks.