Business Insurance reports that the legislation, part of tax bill H.R. 5719, was the subject of intense debate. Senior administration advisors said in a statement of policy they will recommend President Bush veto the bill if it is passed by Congress.
The statement said the requirement 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,” according to Business Insurance.
Benefit experts warned that the new reporting requirement could double fees banks charge HSA enrollees. In addition, they said many banks would be unwilling to pay the costs to upgrade administration systems to substantiate claims for what is now a low-margin business, prompting some to withdraw from the HSA market, resulting in fewer choices for consumers.
The HSA provision, passed in the House on a 238-179 vote, would go into effect in 2011 and, according to the Joint Committee on Taxation, would raise more than $300 million in tax revenue through 2018, Business Insurance said.
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