The Health Savings and Affordability Act of 2009 is a proposed amendment to the Internal Revenue Code. If this amendment is passed, it would allow a tax deduction for various costs related to health insurance. The bill has received support from members of the Republican House Committee on Ways and Means, who, for the most part, do not support President Obama's proposed health care reform.
History
Congressman Steve Austria, who represents the 7th District of Ohio, proposed the Health Savings and Affordability Act on Sept. 22, 2009. Austria created the bill as a means of enabling Americans to "take ownership" of their health care by increasing the availability of Health Savings Accounts, otherwise known as an HSA.
Identification
An HSA is a medical savings account. It is available to people who are enrolled in a high-deductible health plan. An HSA enables participants to accumulate tax-free savings, which can be used to pay for out-of-pocket health care costs. Under present law, people who receive employer-sponsored Health Savings Accounts receive the benefits using their pre-tax dollars, but self-employed individuals, who pay for their own insurance, receive the benefits using after-tax dollars. Whether you are an employee or self-employed, the Internal Revenue Service limits the amount you can put in an HSA. Funds that surpass these limits are considered excessive and are subject to taxation.
Features
The Health Savings Affordability Act of 2009 would level the playing field by providing a tax deduction for self-employed individuals by giving them a tax deduction for health insurance costs. It also increases the amount you can contribute to a Health Savings Account. Under the proposed bill, certain fitness programs and exercise equipment purchases would be regarded as medical expenses and would be tax-deductible.
Theories/Speculation
Under the Health Savings and Affordability Act, small-business owners would be able to deduct the cost of health insurance from their taxes. This may encourage owners to hire additional staff, and develop their businesses. The exercise equipment and fitness program tax deduction may encourage Americans to engage in a healthier lifestyle, which may ultimately lower health care costs.
Misconceptions
Many people use the words Medical Savings Plan and Health Savings Plan interchangeably. While there are some similarities, there are also some distinct differences. A Health Savings Plan allows you, as well as your employer, to contribute to your account within the same year. If you have a Medical Savings Account, you and your employer cannot make contributions to the account within the same year.
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