(Formerly Action Alert )
To: All NAIFA Members
Date: April 11, 2008 (Updated April 15, 2008)
Subject: Gov Alert: Protect Health Savings Accounts - Oppose H.R. 5719 HSA Provision
On April 15, the House passed The Taxpayer Assistance and Simplification Act (H.R. 5719) that would, among other things, impose documentation/substantiation requirements on tax-free payments of medical expenses from Health Savings Accounts (HSAs). The HSA documentation/substantiation provision is a pay-for (an offset to make up for the revenue loss in other parts of the bill).
AHIA and NAIFA are opposed to the HSA provision in H.R. 5710 that would create additional complexity and cost to HSA account holders.
While the bill passed the House (see NAIFA GovWatch: House Passes HSA Documentation Rules), there is still value in contacting you Members of Congress. Please contact your Members of Congress today and ask them to oppose H.R. 5719, which would negatively impact the offering of affordable health care.
- Go to NAIFA's Legislative Action Center at http://capwiz.com/naifa to send an email or find the phone numbers you need.
Sample Comments: It always has a greater impact if you use your own words when submitting comments. The following sample language can be used as the text of your email or as a guideline for your phone call:
Dear Senator or Congressman/Congresswoman:
The House-passed Health Savings Account (HSA) substantiation requirements contained in H.R. 5719 would add enormous costs to HSAs if enacted. HSAs used in conjunction with high deductible health plans have offered a number of my clients an affordable health care solution.
The establishment of a department to administer the expense verifications or utilization of an outside administrator would require a charge to the consumer to cover the additional administration costs. This additional expense would slow the growth of HSA plan implementations and may cause individuals and groups to cancel existing High Deductible Health Plans (HDHPs). This would be a step backwards in the attempt to control rising health care benefit plan costs.
A requirement that expenses that can be paid on a tax-free basis must be documented and substantiated is reasonable. However, current IRS procedures for tracking HSA expenditures are sufficient. Financial Institutions file the 1099 SA to report distributions, the 5498 SA to report contributions received and fair market value. Employers file W-2s which contain specific HSA contribution information, and the account holder files the 8889 form for self reporting contributions and distributions. HSA account activity is subject to audits from the IRS and account holders are advised to retain their receipts documenting qualified medical expenses.
Please allow my clients the option of this affordable coverage and vote against burdensome and costly HSA substantiation provisions.
Technical Assistance? If you have technical questions about using NAIFA's Legislative Action Center, please contact Vicky Dobbin at 703-770-8113, communications@naifa.org.
Thank you in advance for your help on this issue!
Also see NAIFA Action Alerts for alerts sent prior to January 2008.
