Members of the House today voted 270-146 to pass H.R. 436, a health package that includes the text of H.R. 1004 — a bill that would eliminate a requirement that flexible spending account (FSA) holders forfeit any unused FSA balances at the end of the plan year.
The White House says senior advisors will tell President Obama to veto the bill if it reaches his desk, but 37 Democrats crossed party lines to vote for the bill.
The original version of H.R. 436 would have repealed a 2.3% excise tax on medical devices that’s set to be imposed by the Patient Protection and Affordable Care Act of 2010 (PPACA).
Republicans created the version of H.R. 436 that passed, the Health Care Cost Reduction Act package, by bundling the device tax repeal bill together with H.R. 1004, the FSA use-it-or-lose-it fix bill, and three other bills:
- H.R. 5858, a bill that would change health savings account (HSA) tax rules.
- H.R. 5842, a bill that would 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.
- A new bill that would require taxpayers to return 100% of any extra PPACA health insurance purchase tax credits they get. Current low would limit the amount of excess health insurance tax credit payments that the Internal Revenue (IRS) Service could claw back from low-income and middle-income taxpayers.
The PPACA health insurance tax subsidy clawback provision is getting attention because PPACA calls for the IRS to pay the credit to eligible taxpayers in advance, so that taxpayers can use the cash to buy health insurance.
Some taxpayers who do their best to obey the law will get extra credit payments simply because their income increases during the year or they get access to group health coverage, defenders of the current rules say.
Requiring all taxpayers to pay back all excess credits could keep some taxpayers from getting the help they need to pay for health coverage and increase the number of people who are uninsured, administration officials say.