Dear Representative:
On behalf of the 362,000 members of the National Taxpayers Union, I urge you to oppose any legislative efforts that would undermine the function of Health Savings Accounts (HSAs) by forcing a bureaucratic review of every single transaction. HSAs are vitally important tools to consumers and should not be subjected to unnecessary administrative burdens.
Millions of Americans use their Health Savings Accounts every day to purchase medical goods and services they need to keep themselves and their families healthy. The availability of debit cards linked to an HSA has made it easy for Americans to use these tax-advantaged accounts on IRS-approved medical expenditures. The cost containment, convenience, and freedom of HSAs have made them a popular choice in many workplaces.
Though they provide great benefits, the HSA system also includes safeguards to prevent abuse. Those who use their accounts for non-medical expenses are subject to IRS audit. Anyone found to have used their HSA on a non-qualified expense would have to pay income tax and a steep 10 percent penalty as a result.
Nonetheless, some in Congress seem intent on effectively destroying HSAs with "substantiation" language that would require a private sector bureaucrat to review each HSA bill and determine if it is a qualified medical expense or is covered under an insurance policy.
Such language would necessitate armies of paper pushers simply to keep HSA providers in compliance with the law. Needless to say, this would dramatically raise administrative costs, likely leading to higher prices for consumers. It would also diminish the number of companies willing to offer HSAs in the first place.
Health Savings Accounts have been a success story in a system riddled with problems. Including substantiation provisions in the tax bill before you tomorrow will in essence eliminate one of the few popular, free-market solutions to our health care challenges. I urge you to oppose such language and look forward to working with you to improve and protect Health Savings Accounts for the millions of hard-working Americans who use them every day.
Sincerely,
Andrew Moylan
Government Affairs Manager