Boehner Pushes Device Tax-Health Account Package

House Speaker John Boehner is clashing with the Obama administration over H.R. 436, a package that now includes the bill that would eliminate the flexible spending accont (FSA) “use it or lose it” rule.

The best-known section of the new H.R. 436, the Health Care Cost Reduction Act bill, would eliminate a 2.3% excise tax on medical devices that’s set to be imposed by the Patient Protection and Affordable Care Act of 2010 (PPACA).

A staffer on Boehner’s team has posted a blog entry with the headline, “House GOP Leading on Jobs with Vote on Health Care Cost Reduction Act.” Boehner’s staffers also have been posting many tweets supporting the package on Boehner’s official Twitter feed. Other top Republicans also have been promoting the package through their traditional media and social media operations. Some Democrats have expressed support for some H.R. 436 provisions, such as the idea of repealing the medical device tax.

Now the White House says President Obama’s senior advisors will recommend that he veto H.R. 436 if the bill reaches his desk.

PPACA is helping to improve individuals’ health, give American families and small business owners more control of their health care, and “ending the worst practices of insurance companies,” administration officials say in a policy statement.

Expanding access to help health care should help increase the medical device makers’ revenue, and the excise tax would simply cause them to use a portion of their new, PPACA-related revenue to support the health care system, officials say.

Although H.R. 436 came to life as a medical device excise tax repeal bill, Republican leaders have bundled that bill together with several bills of keen interest to players in the benefits community: H.R. 1004, a bill that could eliminate the requirement that an FSA holder forfeit any unused account balance at the end of the plan year; H.R. 5858, a bill that could change health savings account (HSA) tax rules; and H.R. 5842, a bill that could repeal a PPACA provision that prohibits holders of FSAs and HSAs from using account assets to pay for over-the-counter (OTC) drugs unless the drugs are prescribed by a doctor.

Drafters also have included a section that would change the way the Internal Revenue Service (IRS) handles an individual health insurance purchase tax credit created by PPACA.

Under current PPACA tax credit rules, taxpayers would estimate how much they are likely to earn in the coming year. The IRS would give them tax-credit credit cash in advance, so that they could use the money to buy health coverage. Some taxpayers could get too much cash.

Current law would require taxpayers to pay some of the extra cash back to the government. The current rules would limit how much low-income and moderate-income taxpayers would have to pay back.