The House Ways and Means Committee today voted 24-14 to approve a bill that would encourage workers to roll flexible spending account and health reimbursement arrangement assets into health savings accounts.
The bill, H.R. 6134, the Health Opportunity Patient Empowerment Act of 2006, would apply only to the assets that were in FSAs or HRAs on Sept. 21, 2006. The workers who have those accounts could make a one-time, tax-free transfer of the assets into an employee-owned HSA.
The workers would have to make the transfers before Jan. 1, 2012.
H.R. 6134 also would:
- Let taxpayers shift some individual retirement assets into HSAs without paying income taxes or penalties on the transfers.
- Apply the same indexed limit to HSA contributions from all HSA holders. Today, some HSA holders can make annual contributions up to an indexed limit of $2,700 for individuals and $5,450 for families, but an HSA holder with a deductible that is lower than the indexed limit must contribute an amount that is less than or equal to the size of the deductible.
- Apply the same HSA contribution limits no matter when individuals get HSA-compatible, high-deductible health coverage. Today, HSA program rules impose lower contribution limits on individuals who become eligible to set up an HSA sometime after January.
- Allow employers to make higher HSA contributions for rank-and-file employees.
H.R. 6134 was introduced by Reps. Eric Cantor, R-Va., and Paul Ryan, R-Wis.
The Joint Tax Committee estimates implementing the bill would cost the federal government about $1 billion in tax revenue over 10 years.
Congressional leaders are trying to let members leave town by Saturday, to give members time to campaign.
Current plans call for Congress to hold a one-week session starting Nov. 13, then to consider only must-do legislation in December.
Democrats on the Ways and Means Committee said H.R. 6134 supporters have little chance of getting the bill through Congress, but Rep. Bill Thomas, R-Calif., chairman of the Ways and Means Committee, said he thinks the bill could move forward.
The “Senate is excited about this and is just waiting for us to act,” Thomas said.