Blogging Employee Benefits

February 15, 2006

White House Plan for Health Care Reform

Filed under: Healthcare — Fuguerre @ 5:37 pm

The White House has released Reforming Health Care for the 21st Century, describing the Administration’s national health care policy. As previously presented in the President’s State of the Union message and budget proposal, health savings accounts (HSAs) are a central element of the Administration’s plan.

  • Equal Tax Benefits for Individuals and Employers – Individuals who purchase their own HSAs would be granted the same tax advantages as those with employer-provided health insurance. In particular, premiums for HSA-compatible insurance would be deductible from income tax when purchased on the individual market; and an income tax credit would offset payroll taxes paid on premiums for such insurance
  • Removal of the Tax Bias against Consumer-Directed Care – Arguing that the current tax code subsidizes health care provided through insurance without comparably subsidizing health care paid for out-of-pocket, the Administration proposes to permit HSA contributions up to the maximum out-of-pocket health care costs. All taxes on out-of-pocket spending through HSAs would be eliminated.
  • Portable Health Insurance – Employers would be permitted to offer workers a Portable HSA policy, exempt from multiple state mandates. Employees enrolled in a Portable HSA policy could take the policy to a new employer, with lifetime guaranteed renewable tax-free premiums.
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