Two Big Health Care Reform Changes for 2013 — Real Health Care Reform Healthshare

Two Big Health Care Reform Changes for 2013

A lot of attention has been focused on the requirement to be insured in 2014, but a couple a big changes are coming much sooner.


Flexible Spending Accounts Will Be Worth Less


Annual contributions to a medical flexible spending account (FSA) will be limited to $2,500 beginning in 2013. For certain employers, that’s down from $3,000 or $4,000. FSA balances don’t roll over from year to year, so that $2,500 will be all that’s available for the whole year.


Some employers are allowing staff until March 15, 2013 to use up the balance that’s left from 2012, since the 2013 balance will be reduced. If you know you need a medical procedure and you’re relying on an FSA, you can plan accordingly.


Tax Deductions for Medical Expenses Will Be Harder to Claim


Next year, we’ll also see a change in whether medical expenses are deductible. In 2012, you can claim a tax deduction when your medical costs exceed 7.5 percent of your adjusted gross income. Next year, you’ll only have that deduction if your medical expenses are more than 10 percent of adjusted gross income.


One Solution to Both Problems


Your solution to both problems could be a Health Savings Account (HSA). In 2013, an individual is allowed to contribute up to $3,250. A family can contribute up to $6,450. Those who are at least age 55 are also permitted to deposit an extra $1,000. Both individuals and their employers can make those deposits. In fact, family members may contribute to another member’s HSA.


An HSA can offer you other savings to help with the rising cost of health care, too. Money deposited in an HSA is tax-free, and so are withdrawals to pay for qualified health-related products and services. Since you can only open an HSA when you have insurance that’s qualified, you’ll need a plan with a deductible. Those plans typically cost less in premiums, but HSA-qualified plans can have lower out-of-pocket maximums than many other policies. That maximum lets you know what you’d have to spend on covered health care in a worst case scenario, and HSA-qualified plans must limit that to $6,250 for an individual or $12,500 for a family in 2013. To put that in perspective, chemotherapy can run $11,000 per session.


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