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Committee Approves Health Savings Accounts

On June 19, the House Ways and Means Committee approved, 23-16, a bill (H.R. 2351) designed to establish tax-free, employer-sponsored Health Savings Accounts. Sponsored by Committee Chair Bill Thomas (R-CA), the bill would allow individuals to contribute $2,000 annually to the savings accounts; families could contribute $4,000 annually. In order to be eligible for the accounts, employees must either participate in an employer-sponsored health plan that has a minimum deductible of $500 for an individual and $1,000 for a family or be uninsured. Both individual and employer contributions would be tax deductible, although employers would not be required to make contributions to the accounts.

H.R. 2351 also would allow individuals to carry over $500 of unspent money contributed to a Flexible Spending Account.

Republicans said the bill would help low- and middle-income individuals and families save for health care-related expenses, while Democrats countered that the bill would allow employers to offer health care coverage with higher than normal deductibles.

The House is expected to consider the measure next week.

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