NU Online News Service, June 5, 2003, 5:49 p.m. EDT – Congress is now considering a bill that would create a break on federal income taxes for individuals who put money in health savings accounts.
H.R. 2351, the Health Savings Account Availability Act of 2003, would exclude qualified contributions to health savings accounts from taxable income.
The exclusion would apply to individuals with health plan deductibles of at least $1,000 per year. Eligible individuals and employers could make annual contributions of up to 100% of the amount of the deductible, according to a description of the bill provided by the House Ways and Means Committee.
Taxpayers also could roll up to $500 in unspent flexible spending account assets into the health savings accounts without paying taxes on the rollovers, the committee says.
Preferred provider organizations could sell the accounts, and employers could include the accounts in cafeteria plans, the committee says.
Unlike the statute that governs the Medical Savings Account pilot program, which sharply limits participation in the MSA program, H.B. 2351 would set no limits on HSA program participation, the committee says.
Rep. Bill Thomas, R-Bakersfield, Calif., chairman of the House Ways and Committee, and Rep. William Lipinski, D-Chicago, introduced the bill.
“Creating HSAs to assist with the cost of medical expenses is just one way we can help uninsured families better access affordable health care,” Thomas says in a statement about the bill. “HSAs help put individuals in control of their own health care, while helping manage health care’s rising costs.”
Dr. Donald Young, president of the Health Insurance Association of America, Washington, put out a statement of his own praising the HSA bill.
“HSAs can make health insurance even more affordable, and will help to put patients back in control of their own health care,” Young says. “We are particularly pleased the proposed HSAs will avoid some of the restrictions that have limited the workability of medical saving accounts.”
The text of the bill was not available at press time. When the House posts the text on the Library of Congress Web site, readers can look for it by entering the search string “HB2351″ in the Bill Number box at http://thomas.loc.gov