Ways & Means Committee Mark Ups Include Changes to Health-Care Related Taxes

July 12, 2018

The House Ways and Means committee is marking up 11 different bills and other materials this week, ranging from changes to health savings accounts (HSAs) to Affordable Care Act (ACA) provisions.

Many of the bills are focused on making changes to HSAs that generally broaden their flexibility. For example, H.R. 6305 would allow individuals to make HSA contributions without regard to whether their spouse has a health flexible spending account. And H.R. 6309 would allow individuals eligible for Medicare, but enrolled only in Medicare Part A, the ability to contribute to an HSA.

H.R. 6306 would also make changes to health savings accounts (HSAs), including increasing the contribution limits for HSAs from $3,450 to $6,650 for self-only coverage and from $6,900 to $13,300 for family coverage. The JCT estimates that increasing the contribution limits would reduce federal revenues by $14.5 billion over the decade; other changes in the bill bring its 10-year cost to $15.3 billion. H.R. 6199 would allow HSAs to be used for over-the-counter medicines, which the JCT estimates would cost $6.7 billion over the next decade.

Other bills up for consideration include H.R. 4616, which would further delay the ACA’s “Cadillac tax” through December 31, 2022. The Cadillac tax is a 40 percent excise tax levied on health insurance plans valued above a certain threshold, but it has never been implemented because of  previous legislative delays. This bill would also place a temporary moratorium on the ACA’s employer mandate, making it inapplicable for all months between December 31, 2014 and January 1, 2019. The employer mandate requires all employers with at least 50 full-time employees to offer health insurance or pay a penalty. The Joint Committee on Taxation (JCT) estimates that these changes would reduce federal revenues by about $39.5 billion over the decade.

Another proposal, the Personal Health Investment Today Act, or “PHIT Act,” would expand the definition of qualified medical expenses to include things like fitness classes and sports equipment, which would allow individuals to purchase them with their HSAs. The amount would be limited to $500 a year (double that for married or head of household filers), and the amount spent on any single piece of equipment limited to $250. The change excludes expenses related to golfing, hunting, sailing, and horseback riding, and is estimated to cost $3.5 billion over the next decade.

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