Medicare HSA Proposal in President’s Budget


On Monday, the Trump Administration released its budget proposal for the 2019 fiscal year.  The budget proposal typically describes the policy goals of the Administration.  In the proposal released Monday, individuals who are beneficiaries of Medicare would now be eligible to make contributions to a Health Savings Account.  The following is the description of the proposal contained in the Administration’s budget proposal:

Give Medicare beneficiaries with high deductible health plans the option to make tax-deductible contributions to Health Savings Accounts and Medical Savings Accounts—Currently, Medicare beneficiaries in high-deductible health plans are not allowed to make tax-deductible contributions to their Health Savings Accounts (HSAs) or Medicare Savings Accounts (MSAs).  This proposal would give Medicare beneficiaries greater flexibility to take control of their health.  It would allow beneficiaries enrolled in Medicare MSA Plans to contribute to their MSAs, subject to the annual HSA contribution limits as determined by the Internal Revenue Service.  Beneficiaries would also have a one-time opportunity to roll over the funds from their private HSAs to their Medicare MSAs.  Beneficiaries who elect this plan option would not be allowed to purchase Medigap or other supplemental insurance.  Medicare beneficiaries who have an employer-sponsored high-deductible health would also be allowed to make contributions to their HSAs, although Medicare would not cover any of the deductible.

While having a proposal like this in the Administration’s fiscal year 2019 budget proposal is a great first step, the provision will need to be included in legislation considered by Congress.  We will alert the membership if this provision – or any other provision relating to HSAs – is under consideration.
William F. Sweetnam, Jr
ECFC Legislative and Technical Director

Media Contact:

Martin Trussell
(202) 659-4300

About Employers Council on Flexible Compensation

The Employers Council on Flexible Compensation (ECFC) is a non-profit organization dedicated to the maintenance and expansion of private employee benefit programs on a tax-advantaged basis. The organization has two driving missions. The first is to represent and promote flexible compensation programs through effective lobbying. The second is to provide information on flexible compensation programs to member, national opinion leaders and the general public to help create a positive climate for the growth of flexible compensation.