• Study Finds Tax Breaks Would Double Sales of HSAs
• House and Senate Conferees Negotiate Budget Reconciliation Bill
• Member Poll: Finding Financing – Extended Through December

Study Finds Tax Breaks Would Double Sales of HSAs

A recent University of Minnesota study found that health savings accounts (HSA) used in conjunction with high deductible health insurance plans will eventually be used by about 3.2 million Americans as the policy currently stands. However, if Congress passes a tax break for people with HSAs, that number would rise to 7 million. The Bush administration has proposed a refundable tax credit on the premiums paid for HSAs. The credit would pay up to 90 percent of costs for the lowest wage earners, those with an income of $15,000 or less. It would decrease as individuals’ incomes increase. The report says that tax credits with the use of HSAs could reduce the uninsured in the U.S. by 2.9 million people and the credit would cost the federal government $8.1 billion. However, with Congress focusing so much on budget cuts at the moment, it is unlikely this tax credit will happen this year. “With the ever-rising costs of health care, micro-business owners and their employees need affordable alternatives to the current health insurance system,” said NASE president Robert Hughes. The NASE has been a strong supporter of health savings accounts and tax credits to assist micro-business owners and the self-employed. For more information regarding health savings accounts, please go to http://www.hsainsider.com/. House and Senate Conferees Negotiate Budget Reconciliation Bill Before Thanksgiving, the House and Senate passed their respective spending cut packages. In order for the spending cuts to become law, the House and Senate have to compromise on their two different bills and decide on one bill that they can both pass. Now conferees will negotiate a version that both houses hope to pass by the end of the year. Cuts to entitlement programs differ in many ways. The House bill would change how Medicaid operates by giving states more freedom to enact cost-sharing to Medicaid recipients while the Senate includes no such change. Both bills include reimbursements to states affected by Hurricane Katrina for providing health care to victims, although the Senate version provides $1.8 billion while the House version provides $2.8 billion. There are also differences between the two bills on the Medicare stabilizations fund, Medicare doctor payments, and asset transfer rules for the purpose of qualifying for Medicaid. Some do not think Congress can finish this process by the scheduled recess date of December 16th. If it does not pass this year, it can be passed next year and made retroactive. The NASE continues to watch the budget reconciliation process closely and weigh its effects on micro-business. Tell your Members of Congress what you think by visiting the online NASE Legislative Action Center at http://advocacy.NASE.org. Member Poll: Finding Financing – Extended Through December We know this is a busy time of the year for you. That’s why we’re extending the current member poll through December. Take time out to tell the NASE how you have handled the financing of your business in this month’s online poll. Let the NASE know your opinions by visiting the MyNASE Web site at http://my.NASE.org/. Log in to your free MyNASE Web Account. If you have not set up an account, you can do so at http://my.NASE.org/ with your member number. Let your voice be heard in the association by taking this survey during the month of December.