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June 21, 2007
Another Health Savings Account Bill Introduced
U.S. Rep. Charles Boustany, R-Lafayette, introduced legislation to expand access to Health Savings Accounts.
The legislation would build intergenerational "wealth for health" savings by allowing adult children to inherit health investment plans. The Promoting Health for Future Generations Act of 2007 (H.R. 2639) also aims to remove current hurdles that limit veterans and seniors in Medicare from accessing Health Savings Accounts.
"Health Savings Accounts have greatly expanded coverage, but this bill makes them more practical for the working families, veterans, and Medicare seniors who benefit from them," said Boustany, a retired cardiovascular surgeon. "By allowing adult children to inherit a Health Savings Account in the same way that a spouse can, this measure will help working families build 'wealth for health' savings that can be passed on to other generations."
Under current law, families and individuals are unable to deposit their own money in a Health Savings Account after they receive care through Medicare or the VA. Boustany's legislation would eliminate this inequity, providing for increased growth and greater control over personal Health Savings Accounts.
"In removing these barriers, we are putting healthcare decisions back in the hands of the seniors and veterans who know best," Boustany added. "When you consider Medicare's looming financial problems, the affordable coverage and savings contained in this bill make it practical for patients and providers alike."
Posted by Wiley Long at June 21, 2007 10:04 AM
Comments
Great information and post. If this passes and if Im reading it correctly then people will be able to deduct their PREMIUMS FOR HIGH DEDUCTIBLE HEALTH PLANS from their federal income taxes, something only business can do under current law. That would really help those people like myself that work for a living for employers that refuse to provide any health care, retirement etc for their employees. Everytime I do my taxes and see that small business can deduct their health PREMIUMS and I can not it just makes me think that the government doesnt want people to be covered. Allowing people to deduct as business does would give those without coverage more incentive to become covered. This bill is a great step in the right direction and great public policy.
Posted by: Anthony Picallo at June 21, 2007 12:30 PM
I currently am on Medical Leave and receive Long-Term Disability from my employer. This is coordinated with the Social Security disability that I also receive. I am covered by my employer under a HDHP and also receive Medicare Part A coverage (which I have not used at all) that is automatic for all Social Security disability beneficiaries (who cannot opt out of the coverage).
As the law stands right now, I am not allowed to open or contribute to an HSA due to my Medicare coverage. Further, my employer is now saying that people enrolled in the HDHP are not allowed to enroll in the Flexible Spending Plan, which I used to spread out my health care costs when I had non-HDHP coverage.
This places a hardship on me over other employees because:
1. I had to forego a $600 non-taxable matching credit (i.e. free money) for employees opening a HSA when they began coverage under the HDHP.
2. Though the HDHP still is the lowest yearly total cost for me, I have no employer-associated funds from which to draw to even out my health care costs over the year.
3. My contributions to either an HSA or Flexible Spending Account would be pre-tax. Granted, I can itemize my medical expenses at tax time, but as everyone knows, itemizing means foregoing the standard deduction (which will probably be higher that itemizing anyway). In addition, I will be paying extra Social Security and Medicare taxes that I will never get back because my taxable earnings are too low to qualify for additional "quarters" of coverage under Social Security.
In short, if I am reading this article correctly, people receiving employer-sponsored Long-Term Disability, HDHP coverage and Medicare (through virtue of Social Security coverage) will be able to open and fund an HSA after all. This would be good news for me and end a restriction that, in my opinion, makes absolutely no sense for people in my situation. I would further say that Medical Expenses paid with after-tax money ought to be a line-item (not a scheduled) deduction for everyone.
Posted by: Amy at October 7, 2007 01:57 PM