Last week, the U.S. House Ways and Means Committee held a markup to consider bills from the Subcommittee on Health aimed at expanding consumer-directed health care and lowering premiums. The markup included legislation to modernize health savings accounts (HSAs), an additional one-year delay of the “Cadillac” tax beyond 2020 and a repeal of the employer mandate.
The National Association of Manufacturers (NAM) appreciates efforts to advance these three key initiatives as manufacturers continue to cite rising health care costs as a primary business concern. Together, employees and employers are spending more on higher health insurance premiums. HSAs are a viable tool for employers and employees to absorb increased health care costs.
HSAs, or tax-exempt savings accounts, allow for individuals to pay for eligible health care expenses and for employees to have more control over their health care spending. Employers are increasingly offering consumer-driven high-deductible health plans that are paired with HSAs. Modernizing the rules governing HSAs would encourage savings for future health care expenses and provide the flexibility patients need to have greater control over their own health care decisions.
Since HSAs were established 15 years ago, there have been significant advancements in health benefits outside of traditional medical insurance policies. These include the use of care coordination and medical homes, direct primary care, telemedicine, onsite primary medical care sponsored by employers, retail clinics and more robust incentives, such as fitness memberships to promote wellness. In addition, management of chronic disease is an increasing priority, and further efforts should be made to provide greater flexibility for chronic disease reimbursement with HSAs.
As a steering committee member of the National Coalition on Benefits, the NAM sent this letter to Ways and Means Committee members explaining the opportunities for statutory reforms to HSAs and the importance of repealing the “Cadillac” tax. Manufacturers support the Ways and Means Committee’s legislative efforts as a first step to better align the utilization of HSA accounts with today’s health care landscape and provide employers added flexibility to design best-in-class benefits for their employees.
In addition, manufacturers support efforts to reduce burdensome taxes on employer-sponsored health coverage that increase premium costs for employees. The NAM continues to lead efforts to repeal and delay the medical device tax, a 2.3 percent excise tax on lifesaving medical devices; health insurance tax, a multibillion-dollar tax levied on fully insured health plans; and the “Cadillac” tax, a 40 percent tax on high-quality insurance plans.
Manufacturers want to invest in their people by offering quality health insurance programs to attract and maintain a healthy workforce. In fact, 98 percent of manufacturers provide their employees’ health benefits. The federal government should be taking steps to ensure employers can continue to make affordable health benefits available to their employees by modernizing, repealing and delaying policies that unnecessarily raise the cost of or limit the tools to deliver vital health benefits.