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H.R. 1 Lets HSA Holders Deduct LTC Premiums

By Staff Writer

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NU Online News Service, Nov. 25, 2003, 5:59 p.m. EST – Congress has included a provision in H.R. 1, the Medicare Prescription Drug, Improvement and Modernization Act of 2003, that will let holders of the new Health Savings Accounts use tax-deductible contributions to pay for long term care insurance.[@@]

HSA holders also can use HSA funds to pay for temporary insurance while they are unemployed and health insurance products other than Medicare supplement insurance after they reach age 65, according to a copy of the bill text posted on the House Ways and Means Committee Web site.

Taxpayers can qualify to open HSAs by buying individual health insurance with a deductible of at least $1,000 or family coverage with a deductible of at least $2,000.

The LTC insurance provision will appear in Section 223(d)(2)(c)(ii) of the federal Social Security Act, and it appears on page 664 of the version of the bill on the Ways and Means Web site.

The Senate approved the bill today and the House approved it Saturday. Experts say President Bush, a strong H.R. 1 supporter, is all but certain to sign the bill into law.

A link to the conference report version of the bill is available at http://waysandmeans.house.gov/Special.asp?section=43