BBB change: ALL Bronze and Catastrophic ACA plans now eligible for HSAs

[jim584672]

HSAs don't require earned income and can reduce MAGI (useful for cliff avoidance).

HSA contributions limits for 2025:
Self-only coverage: $4,300.
Family coverage: $8,550.
Catch-up contribution (55+): $1,000.

Tracking the Health Savings Accounts Provisions in the 2025 Reconciliation Bill | KFF

KFF is tracking the Health Savings Accounts provisions included in the 2025 federal budget reconciliation bill. The House-passed bill includes several changes, while the proposed Senate bill does not address HSAs.

www.kff.org

 

[Flieger]

Thanks! I was just referring to this in another thread. Will definitely be taking advantage of this.

Flieger

 

[Aerides]

I have always had a bronze with hsa.

 

[jim584672]

I have always had a bronze with hsa.

According to KFF the current law limits the Bronze plans that can qualify for a HSA, the BBB change says all Bronze and Catastrophic are now HSA eligible.

Current law: "Not all bronze plans meet the requirement to be paired with an HSA (the out-of-pocket maximum or other design features might not meet IRS rules). Catastrophic plans are ineligible to be paired with an HSA."

 

[MichaelB]

I have always had a bronze with hsa.

That’s all I had when using ACA plans

 

[COcheesehead]

We are big fans of bronze HSA plans.

 

[Aerides]

According to KFF the current law limits the Bronze plans that can qualify for a HSA, the BBB change says all Bronze and Catastrophic are now HSA eligible.

Current law: "Not all bronze plans meet the requirement to be paired with an HSA (the out-of-pocket maximum or other design features might not meet IRS rules). Catastrophic plans are ineligible to be paired with an HSA."

Right, but not all plans of any level have been hsa-eligible. You always had to filter on them to pick the ones that you want. HSA-eligible plans have typically also been high-er deductible than non-hsa.

Either way, by the title of this thread it looks like having an hsa and a bronze plan is some new thing resulting from this bill. It's not.

But it does look like, per the wording in the linked chart, that the eligible bronze plans have been expanded? Still, since that doesn't go into effect until Jan 1, we won't know which ones for some time. Perhaps with this year's open enrollment, but I would imagine that's gonna be a scramble as that planning is already near complete.

Oh I saw the HSA-use of gyms is in here too, but only $500 per year. Darn I was gonna try a fancy new gym!

 

[jim584672]

Right, but not all plans of any level have been hsa-eligible. You always had to filter on them to pick the ones that you want. HSA-eligible plans have typically also been high-er deductible than non-hsa.

Either way, by the title of this thread it looks like having an hsa and a bronze plan is some new thing resulting from this bill. It's not.

But it does look like, per the wording in the linked chart, that the eligible bronze plans have been expanded? Still, since that doesn't go into effect until Jan 1, we won't know which ones for some time. Perhaps with this year's open enrollment, but I would imagine that's gonna be a scramble as that planning is already near complete.

Oh I saw the HSA-use of gyms is in here too, but only $500 per year. Darn I was gonna try a fancy new gym!

I don't think the gym change made it into the Senate version it says "No Provision". Effective date: January 1, 2026.

 

[audreyh1]

I only ever had Bronze plans and they were HSA eligible.

 

[N02L84ER]

We only used Bronze plans, but half of the years there were either no HSA eligible Bronze plans available or they were more expensive than the nonHSA plans even after accounting for the HSA contribution's reduction in income.

 

[surprising]

Side question - how does an HSA work for early retiree where income mostly comes from cash, STCG, LTCG, dividends, interest? Can it really offset capital gain income?

 

[Flieger]

Side question - how does an HSA work for early retiree where income mostly comes from cash, STCG, LTCG, dividends, interest? Can it really offset capital gain income?

I guess it depends if you are working a p/t job or something. I will make enough with my fun job at the brewery to have W2 income for contribution to HSA.

Flieger

 

[Golden Mean]

Couple of questions:
I've always gone for a sliver plan because bronze plans didn't get cost sharing reductions. I guess those who are picking bronze plans over silver are above the MAGI level where those CSRs phase out? So it doesn't matter?

You can't pay premiums with the HSA, correct? If you can't, it looks to me like the HSA gains you little unless you go to the doctor often? What are the main advantages those using HSA are seeing?

Thanks

 

[surprising]

Couple of questions:
I've always gone for a sliver plan because bronze plans didn't get cost sharing reductions. I guess those who are picking bronze plans over silver are above the MAGI level where those CSRs phase out? So it doesn't matter?

You can't pay premiums with the HSA, correct? If you can't, it looks to me like the HSA gains you little unless you go to the doctor often? What are the main advantages those using HSA are seeing?

Thanks

While working, HDHP plus HSA was the way to go. My HDHP plan had $0 premium, high deductible and pre-tax HSA. All good.

The ACA bronze HSA plans I'm seeing are $1500 (pre subsidy) premium, extremely high deductible ($15K - $18K), and questionable benefit of HSA if you don't have wage income. Doesn't make a lot of sense to me.

 

[surprising]

I guess it depends if you are working a p/t job or something. I will make enough with my fun job at the brewery to have W2 income for contribution to HSA.

Flieger

No wage income - so is HSA useless then for me?

 

[MichaelB]

HSA deduction is an above the line adjustment, so there is no need for earned income. It offsets investment income very nicely.

 

[COcheesehead]

Couple of questions:
I've always gone for a sliver plan because bronze plans didn't get cost sharing reductions. I guess those who are picking bronze plans over silver are above the MAGI level where those CSRs phase out? So it doesn't matter?

You can't pay premiums with the HSA, correct? If you can't, it looks to me like the HSA gains you little unless you go to the doctor often? What are the main advantages those using HSA are seeing?

Thanks

An HSA gets you a tax credit, grows tax free and as long as you have an offsetting medical expense of the same amount, the money comes out tax free.

 

[COcheesehead]

No wage income - so is HSA useless then for me?

You don’t need earned income.

 

[COcheesehead]

I guess it depends if you are working a p/t job or something. I will make enough with my fun job at the brewery to have W2 income for contribution to HSA.

Flieger

Earned income not required.

 

[perinova]

it's working well for us.
we reinvest some of the dividends into tax-deferred status and lower our MAGI at the same time.

Interestingly I am just reading that you can't put IRA money into an HSA (actually you can do it once). If you take money out of your IRA, then can you contribute to an HSA the same year? I am kind of confused about this.

 

[MichaelB]

An HSA gets you a tax credit, grows tax free and as long as you have an offsetting medical expense of the same amount, the money comes out tax free.

Not a tax credit. It’s an adjustment to income, similar to how an IRA works.

 

[Flieger]

Earned income not required.

Ahhh. Thanks! But you can only contribute as much as you have income, correct?

Maybe I was thinking Roth for W2 income?

Flieger

 

[Golden Mean]

Not a tax credit. It’s an adjustment to income, similar to how an IRA works.

This is what I thought, When I ran the numbers (couple of years ago), it'd save me maybe $100 on taxes. And for this I'd have the money stuck in an (additional) account only useful for medical expenses. For 99% of my adult life I've had $0 medical expenses. If I could pay the premium through it, I'd totally be onboard.

 

[perinova]

Ahhh. Thanks! But you can only contribute as much as you have income, correct?

Correct. But a Third party can contribute to your HSA.
So I am guessing if you put more than your earned. You just can't take the total deduction put nobody will mind??

 

[COcheesehead]

Not a tax credit. It’s an adjustment to income, similar to how an IRA works.

A deduction then, does that work?