Federal Regulation and Consumer-Driven Health Plans
Federal Regulation and Consumer-Driven Health Plans covers the statutes that override policy language and the tax-advantaged accounts paired with high-deductible coverage.
Federal statutes
- HIPAA - portability, limits on pre-existing-condition exclusions when creditable coverage exists, special enrollment on loss of other coverage, guaranteed renewability, privacy of health information.
- ACA - guaranteed issue, no pre-existing exclusions, community rating, essential health benefits, preventive services at no cost-sharing, dependent coverage to age 26, medical loss ratio rebates. The federal individual mandate penalty is $0 since 2019, though some states assess their own.
- ERISA - group plan fiduciary, reporting, and disclosure duties; preempts state law for self-funded plans.
- COBRA - 18 months for termination or reduced hours; 29 months if disabled at the time of the event; 36 months for dependents after death, divorce, or Medicare entitlement.
- FMLA - 12 weeks unpaid leave with continued coverage for eligible employees.
- GINA, MHPAEA (mental health parity), USERRA, Medicare Secondary Payer, and the Women's Health and Cancer Rights Act (reconstruction after mastectomy).
Consumer-driven accounts
- HSA - requires HDHP enrollment, no disqualifying coverage, and no Medicare. Triple tax advantage, portable, investable, no use-it-or-lose-it. For 2024: HDHP minimum deductible $1,600 self-only/$3,200 family; out-of-pocket maximums $8,050/$16,100; contribution limits $4,150/$8,300 plus $1,000 catch-up at 55.
- FSA - employer-owned, salary reduction, generally use-it-or-lose-it with a small carryover or grace period; not portable.
- HRA - employer-funded, not portable, often paired with HDHPs.
Worked example
An employee enrolled in Medicare in June wants to keep contributing to her HSA. She cannot: Medicare enrollment is disqualifying coverage, so contributions must stop, prorated to the months before enrollment. Excess contributions left in the account are taxable and may incur a 20% excise tax unless corrected.
Traps
Assuming COBRA lasts 18 months for every event; thinking an FSA rolls over like an HSA; forgetting an HSA can pay premiums only for COBRA, LTC, or while receiving unemployment; and missing that ACA preventive services require zero cost-sharing.