7 Consumer Benefits Changes and Proposed Legislation to Know for 2020

White House Announces New HRA Plans in 2020

We know it can be challenging to keep up with new legislation and changes to benefits plans that happen throughout the year, so we’ve created a quick guide to the biggest announcements of 2019.

Heading into the new year, it’s important to know what benefits employers can offer employees, as well as any updates to contribution limits, eligible expenses, and new plan designs that expand coverage options. We’ve summarized the top seven announcements on 2020 benefits changes and legislation that employers and brokers should know, complete with links to detailed blog posts that will help you brush up before the new year!

1. 2020 Health Savings Account (HSA) Contribution Limits

In May of 2019, the Internal Revenue Service (IRS) announced the 2020 HSA contribution limits increased, allowing employees with individual coverage to set aside up to $3,550 a year, pre-tax, and those with family plans to set aside up to $7,100 a year, pre-tax (up from $3,500 and $7,000, respectively). The minimum deductible for qualifying high deductible health plans (HDHPs) and the maximum out-of-pocket expenses for HDHPs also increased.

Read about these changes for the new year in our HSA contributions blog: ConnectYourCare Announces Increases in 2020 IRS Limits for Health Savings Accounts

2. New Health Reimbursement Account (HRA) Designs for 2020

Starting in 2020, employers can utilize two new HRA designs. The Individual Coverage HRA (ICHRA) will allow companies to offer benefits to certain classes of employees, even if they already offer a group health insurance plan. The Excepted Benefit HRA (EBHRA) allows employees to receive reimbursements without participating in the group health insurance plan offered by their employer.

Get the details about these new HRA plans available in 2020 in our blog: White House Announces Two New HRA Designs Starting in 2020

3. Executive Order to Improve HSAs, HRAs, and Flexible Spending Accounts (FSAs)

President Trump issued an Executive Order, titled “Improving Price and Quality Transparency in American Healthcare to Put Patients First.” The order directs the Department of the Treasury to improve HSAs and FSAs by including more qualified preventive health care options for chronic conditions, increasing the annual FSA contribution limit, and adding more health care arrangements that qualify for HSA, FSA, and HRA spending.

There is more information about the Executive Order in our blog: Legal Briefing: Executive Order Calls for Enhancement and Expansion of HSAs, FSAs, and HRAs

4. HSA Qualifying Preventive Care for Chronic Conditions

In July, the IRS announced additional medications and services now considered preventive care for chronic conditions that qualify as HSA-eligible expenses for those with HDHPs.

Check out our blog post for a detailed list of the chronic conditions, medicines, and services that are now eligible, and learn the criteria for qualifying treatments that may not be listed: HSA Eligibility: IRS Lists Additional Preventive Care Items for Those with Chronic Conditions

5. Health Savings for Seniors Act

Also in July, U.S. Representatives Ami Bera (D-CA) and Jason Smith (R-MO) introduced the H.R. 3796 Health Savings for Seniors Act. This proposed legislation would allow people enrolled in Medicare plans to be eligible to contribute to their HSAs in order to offset the increasing out-of-pocket costs for older Americans. If passed into law, the Health Savings for Seniors Act could make it easier for seniors receiving Medicare benefits to afford and save for rising health care costs in retirement.

For a detailed summary, read our blog about the new bill: Legal Briefing: Health Savings for Seniors Act

6. 2020 Contribution Limits for FSAs, Commuter Benefits, and Adoption Assistance

Last month, the IRS announced the 2020 contribution limits for several tax-advantaged benefits programs. In 2020, employees can contribute up to $2,750 to their health care FSA a year (up from $2,700 in 2019), and those with commuter benefits can set aside $270 a month pre-tax for transit passes or $270 a month for parking expenses (up from $265 for both in 2019). The maximum employees can set aside for adoption assistance is now $14,300 pre-tax annually, (up from $14,080 in 2019). These increases are positive overall as they reduce taxable income for employees and employers.

For more details, check the blog: The IRS Announces 2020 Limits for FSAs, Commuter Benefits, and Adoption Assistance

7. California Legislation for FSA Communications

California passed Assembly Bill 1554 that requires employers to notify employees who participate in health care FSAs, dependent care FSAs, and adoption assistance programs of any deadline to withdraw funds before the plan year is up. This bill goes into effect on January 1, 2020, but as the bill currently stands, employers and third-party administrators would benefit from further regulation or clarification from the California Department of Labor.

We cover what we currently know about this legislation in this post: Assembly Bill 1554: New California Law Requires Employers to Notify FSA Participants of Withdrawal Deadlines

By |2019-12-05T14:12:56-05:00December 5th, 2019|Brokers, Employer Posts, Legislation, News|
Disclaimer: ConnectYourCare does not provide tax or legal advice. This information is not intended and should not be taken as tax or legal advice. Any tax or legal information in this notice is merely a summary of ConnectYourCare’s understanding and interpretation of some of the current tax regulations and is not exhaustive. You should consult your tax advisor or legal counsel for advice and information concerning your particular situation before making any decisions.