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Ways and Means to Mark Up HSA and FSA Bills

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The House Ways and Means Committee plans to meet Thursday to mark up a collection of bills that could revamp health savings accounts (HSAs) and flexible spending accounts (FSAs).

The committee already has sent about 10 bills, substitute bills and other documents to the congressional Joint Committee on Taxation for budget impact reviews.

One of the bills, for example, H.R. 5842, the Restoring Access to Medication Act bill, would restore health account holders’ ability to use HSA and FSA cash to pay for over-the-counter medications not prescribed by physicians.

Members of Congress took away that ability in an ability to cut the tax revenue lost to the FSA and HSA programs and use the anticipated increase in tax revenue to fund other programs.

Another bill up for consideration, H.R. 5858, would let early retirees use HSA funds to pay for health insurance, and H.S. 1004 eliminate the current FSA “lose it or use it” rule. Employers could pay unused FSA balances to the account holders after the end of the plan year, and the account holders would pay income taxes on the balance payments.