One of the key topics in the State of the Union address concerned Health Savings Accounts (HSAs), a concept introduced by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 and first effective for 2004. Health Savings Accounts combine a high-deductible health insurance policy with a savings-type account to pay medical costs not covered by insurance on a tax-advantaged basis. They are a consumer-driven approach to health coverage that the President hopes to expand in several key ways:
- Create Association Health Plans to allow small businesses access to low-cost insurance in the same way now available to large corporations and unions.
- Improve deductibility for HSAs (e.g., allow tax-deductible contributions for all out-of-pocket expenses rather than limiting them to the insurance deductible).
- Add an income tax credit for any payroll taxes on high-deductible health care premiums.
BARBARA WELTMAN | Columnist
Barbara Weltman is an attorney and a trusted professional advocate for small businesses and entrepreneurs. She is the author with such titles as J.K. Lasser?s Small Business Taxes and Smooth Failing, and she contributes regularly to American Express OPEN and SBA.gov. Her articles have appeared in the Wall Street Journal and U.S. News and World Report. Weltman is also the publisher of Idea of the Day and monthly e-newsletter Big Ideas for Small Business at www.barbaraweltman.com and hosts radio shows and podcasts, including Build Your Business radio. She has been named one of the 100 Small Business Influencers in the U.S. for the third year in a row.