New Tax Law Creates Series Of Tax Breaks For HSA Consumers
February 13, 2007 | General
President Bush signed H.R. 6111, the Tax Relief and Health Care Act of 2006 on December 20, 2006. This new tax law expands and creates improvements in the current HSAs laws.
First, it allows HAS users to roll money over from other tax-favored accounts, such as their companies health reimbursement accounts, individual retirement accounts, and flexible spending accounts.
The law also increases HSA annual contributions limits. The existing law stipulated users could make deposits totaling the amount of their health insurance policy deductible over the course of each year. Now, as long as the insurance policy qualifies for HSAs, users may contribute the maximum $2,700 per family for an individual or $5,450 for a family.
Current law requires employers to contribute the same amount to all workers HSAs. Under the new law, employers will be able to contribute more money to the HSAs of lesser-paid employees. The treasury department will publish cost-of-living adjustments for HAS contributions and deductible amounts in March, rather than August.
How popular are HSAs? In late 2004, about 500,000 individuals had them; currently more than 3 million use them. Where are they going form here?? What is there in the market place that will displace the momentum toward consumer directed healthcare? Will tax relief and tax savings be enough to propel the movement forward??
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Comment by Eileen Martinez February 14, 2007
The more “user-friendly” the tax laws become regarding HSA accounts the closer we will get to a healthcare system controlled by the consumer and not the insurance companies.
Comment by JP February 14, 2007
I think the tax incentives or tax savings by themselves will not be enough to propell the American people to take focus on the mangement of their health care. It will not be until employers really begin to transfer the cost of healthcare to their employees. The cost of healthcare is major component of a company being profitable or competitive in the market place. As more and more employers focus on educating their employees as to the cost of healthcare and it’s impact on their businesss, change will begin to hapen.