Health Reform WK-EDGE Ways and Means approves health care-related tax package
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Monday, July 23, 2018

Ways and Means approves health care-related tax package

By Wolters Kluwer News Staff

The House Ways and Means Committee has approved 11 health care-related tax bills. Members of the committee met July 11 and July 12 for the two-day markup. The House has not yet scheduled a floor vote on the bills. The measures are expected to be taken up by the end of the month, according to Chairman Kevin Brady (R-Tex).

Although several of the tax bills were approved with bipartisan support, the health care-related tax package is largely a Republican initiative. Republicans’ legislative priorities focused in particular on enhancing tax-favored Health Savings Accounts (HSAs).

HSAs "Health Savings Accounts are an important tool for families to set aside money that’s tax-free to pay for needed health care expenses," Brady said during opening statements. "They give choice and lower costs," he added.

However, Democrats consistently voiced opposition toward Republicans’ favorable policy stance on HSAs, often criticizing HSAs as being only for the wealthy. "The provisions we are considering today provide America’s wealthiest another option to stash tax-free money at a cost of $92 billion to tax payers," ranking member Richard Neal (D-Mass) said, citing to the Joint Committee on Taxation’s (JCT) cost estimates. According to Neal, HSAs "simply provide greater tax shelters for those with the means to take advantage of them."

The following 11 bills are headed to the House floor:

  • HR 6199: The bipartisan bill would amend the tax code to include certain over-the-counter medical products as qualified medical expenses;
  • HR 6312: The bipartisan bill would amend the tax code to add certain qualifying sports and fitness expenses to the definition of qualified medical expenses;
  • HR 6301: The bipartisan bill would amend the tax code to expand access to health savings accounts (HSAs) by providing high deductible health plans with first dollar coverage flexibility;
  • HR 6305: The bipartisan bill would amend the tax code to expand access to and enhance the use of HSAs by clarifying that certain employment related services are not treated as disqualifying coverage for purposes of HSAs. Also, the bill would allow an eligible individual to make HSA contributions if a spouse has a Flexible Spending Account (FSA), and it would allow FSA and Health Reimbursement Account (HRA) terminations or conversions to fund HSAs;
  • HR 6317: The bipartisan bill would amend the tax code to allow HSA-eligible individuals that participate in a direct primary care (DPC) arrangement not to lose their HSA-eligibility because of DPC participation;
  • HR 6306: The bill would amend the tax code to expand access to and enhance the use of HSAs by increasing HSA contribution limits, permitting spousal catch-up contributions into the same account, and creating a grace period for medical expenses incurred before the establishment of an HSA;
  • HR 6309: The bipartisan bill would amend the tax code to allow individuals entitled to Medicare Part A by reason of being over age 65 to contribute to HSAs;
  • HR 6311: The bill would amend the tax code and the ACA to modify the definition of qualified health plan for purposes of the health insurance premium tax credit and would allow individuals purchasing health insurance in the individual market to purchase a lower premium copper plan;
  • HR 6313: The bill would allow the carryforward each year of health flexible spending arrangement account balances;
  • HR 6314: The bill would amend the tax code to allow plans categorized as catastrophic and bronze in the individual and small group markets to qualify for HSA contributions; and
  • HR 4616: The bill would amend the ACA to provide for a temporary moratorium on the employer mandate and would provide an additional one-year delay of the "Cadillac" excise tax on high cost employer-sponsored health coverage.

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