New Executive Order May Enhance CDHPs

On June 24, 2019, President Donald Trump signed an  executive order  on  “Improving Price and Quality Transparency in American Healthcare to Put Patients First.” The main objective of the executive order  is to increase the transparency of healthcare costs so that people can make more informed decisions on the healthcare  services  they  utilize.  This  has  generally  been  a  problem  that  has  plagued  the  healthcare industry for decades.

There was also a section of the executive order that aims to enhance  Flexible Spending Accounts (FSAs),  Health  Savings  Accounts  (HSAs)  and  Health  Reimbursement  Arrangements  (HRAs).  In  particular,  the executive order calls for the Department  of Treasury to issue guidance that would make the following changes:

1. Qualified High Deductible Health Plans (HDHPs) could provide low-cost preventive services prior to the  deductible  being  satisfied  for  individuals  with  chronic medical  conditions.  Coverage  for these services would not disqualify an individual from establishing and contributing to an  HSA. The Department of  Treasury has 120 days from the date of the executive order to issue such guidance. 
2. Expenses related to direct primary care arrangements and healthcare sharing ministries would be considered  eligible  medical  expenses  under  Code  Section  213(d).  These  expenses  could  be reimbursed from an FSA, HRA or HSA tax-free. The Department of Treasury has 180 days from the date of the executive order to issue such guidance.
3. The amount of unused funds that can be carried over from an FSA into the following plan year is to be increased. Currently, a maximum of $500 can be carried over into the following  plan year. The Department of  Treasury has 180 days from the date of the executive order to issue such guidance.

It  should  be  noted  that  while  the  executive  order  calls  for  these  enhancements,  the  Department  of Treasury can only issue such guidance to the extent permissible by law. The Department of Treasury does  not have the ability to write new laws, but they do have the ability  to  regulate, interpret and enforce existing laws.