White House Threatens To Veto Tax Bill In Part Because Of Provision On HSAs
Main Category: Health Insurance / Medical InsuranceAlso Included In: Public Health
Article Date: 16 Apr 2008 - 5:00 PDT
The White House on Monday threatened to veto a tax bill (HR 5719) because of a provision under which individuals with tax-free health savings accounts would have to provide evidence that they used funds in the accounts for medical purposes, CQ Today reports. Under the provision, individuals with HSAs after Dec. 31, 2010, would have to provide evidence that they used funds in the accounts for medical purposes.
Current law allows use of funds in HSAs for nonmedical purposes, but the funds are taxed as income and assessed a 10% penalty in such cases. The Joint Committee on Taxation estimates that the provision would increase tax revenue by about $308 million over 10 years through collection of the penalties and decreased use of HSAs to defer or avoid tax payments.
Republican lawmakers and companies that benefit from HSAs have criticized the provision, which they maintain would have negative effects for the seven million individuals with the accounts. According to a statement of administration policy from the White House Office of Management and Budget, the provision is "unnecessary for efficient tax administration, inconsistent with the flexibility purposely afforded HSAs at their inception, and could undermine efforts by employers, individuals and insurers to reduce health care costs and improve health outcomes by empowering consumers to take greater control of health care decision-making" (Rubin, CQ Today, 4/14).
Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation© 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.
|
Please rate this article: (Hover over the stars then click to rate) |
Patient / Public: |
or |
Health Professional: |
Any medical information published on this website is not intended as a substitute for informed medical advice and you should not take any action before consulting with a health care professional. For more information, please read our terms and conditions.
Contact Our News Editors
For any corrections of factual information, or to contact the editors please use our feedback form.
![]()
Please send any medical news or health news press releases to:
| Back to top | Back to front page | List of All Medical Articles |
| Privacy Policy | Terms and Conditions | © 2009 MediLexicon International Ltd |





