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Senate
Unanimously Passes Armstrong's Health Savings Account Legislation
State Program Would
Complement Existing Federal Program,
Give Pennsylvanians More
Control Over Their Health Care
HARRISBURG -- The
state Senate has unanimously passed Senate Bill 854, which would provide for
Health Savings Accounts in Pennsylvania.
The bill's sponsor, Senator Gib
Armstrong (R-13), said it's designed to give Pennsylvanians more control over
their health care by allowing them to set up Health Savings Accounts exempt from
state Personal Income Tax. He explained that Health Savings Accounts would
apply to high-deductible policies designed to cover big expenses, thereby
freeing up regular health insurance to cover more routine expenses at lower
cost.
"Allowing Pennsylvanians to
establish Health Savings Accounts will encourage them to set money aside for
their healthcare expenses," Armstrong said. "It will give them the means to pay
for healthcare services of their own choosing without having to worry about
constraints set by insurers or employers. Having that kind of control also
creates an incentive for families and individuals to work with their doctors and
spend their healthcare dollars prudently, avoiding unnecessary expenses and
focusing on what's really important."
An employer or employee can
contribute to health savings accounts. The accounts may be established with
banks and insurance companies or with other entities approved by the Internal
Revenue Service to hold Individual Retirement Accounts (IRAs) or Medical Savings
Accounts (MSAs). Other entities may request approval to be an HSA trustee or
custodian.
Interest on the accounts would
also be tax-exempt, and the accounts can carry over from year to year without
limit.
Withdrawals from the account
are tax free if they are used for the costs of diagnosis, cure, mitigation,
treatment, or prevention of disease, and the costs for treatments affecting any
part or function of the body. They include the costs of equipment, supplies,
and diagnostic devices needed for these purposes. They also include dental
expenses.
Armstrong noted that the
federal government already provides for Health Savings Accounts, as do many
state governments. "Pennsylvania needs to do the same so we can let people have
more control over the best way to provide for their healthcare expenses," he
said.
The measure now goes to the
House of Representatives for consideration.
Armstrong's measure is part of
Senate Republicans' "Playbook for Progress," a game plan unveiled in February
that is designed to make Pennsylvania a better place in which to live and work.
The plan includes measures to roll back the state's personal income tax and
place strong new restrictions on the growth of state spending.
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