Rep. Andy Biggs (R-Ariz.) has introduced the “Freedom for Families Act,” legislation that allows individuals or families to use funds from Health Savings Accounts (HSAs) to cover expenses during the birth or adoption of a child, as well as in the event of a serious family illness. Unlike most paid family leave proposals, this bill harnesses the free market to empower families to control their savings and leave. ATR supports this legislation and urges Members of Congress to co-sponsor this proposal.
H.R. 2163 allows families to use HSA dollars to pay for family leave regardless of their employment situation. Individuals that are qualified for federally-mandated leave, unpaid leave, or are currently unemployed can use HSA funds to pay for their leave. The bill also removes unnecessary restrictions on HSAs by increasing the annual contribution limit so families can exert more control over their savings. Under this bill, HSA contributions increase to $9,000 for individuals and $18,000 for joint filers.
HSAs are vital for American families. They are used in conjunction with low premium, high-deductible health insurance plans and allow families to spend their own money on their own health needs. Since they were created 16 years ago, HSAs have become a popular vehicle toward promoting patient choice in health care and are today used by an estimated 25 million American families and individuals.
There are several advantages to using HSA funds to pay for leave.
- HSAs are portable, which allows individuals to carry funds from one job to the next without fear of losing their accrued benefits.
- There is no minimum period of employment to use these funds, and no need to pay them back once you’ve used them.
- Contributions are completely voluntary, and completely customizable to the needs of families and individuals.
- Contributions can be made by the account holder, family members, or businesses alike.
- There is no need to borrow against retirement or delay retirement to take leave.
Instead of embracing a top-down, one-size-fits-all approach to paid family leave that would impose onerous costs and federal mandates on American businesses, the Freedom for Families Act empowers families to control their savings and leave. Congress should pass this legislation, and President Trump should sign it into law.