FOR IMMEDIATE RELEASE
ICBA Applauds Enactment of Health Saving Account Improvements
Washington, D.C. (December 21, 2006)—The Independent Community Bankers of America (ICBA) applauds enactment of ICBA-backed Health Savings Account (HSAs) improvements signed into law by President Bush as part of the Tax Relief and Health Care Act of 2006 (H.R. 6111).
“ICBA is pleased this new law expands the options for individuals and small businesses to plan for health care expenditures through Health Savings Accounts,” said Terry J. Jorde, ICBA chairman and president and CEO of
CountryBank USA, Cando, ND. “More community banks throughout the country will be able to help their customers find the best way to use HSAs to meet their individual needs and circumstances.”
With more than 3.2 million consumers already using HSAs, the new provisions allow individuals greater flexibility to save for health expenses. There are no income limits that effect eligibility, the savings accumulate tax free, and the money belongs to the saver, making it portable regardless of where an account holder works.
The newly added improvements making HSAs even more attractive include:
- Eliminating the link between the savings contribution amount and the health plan deductible. In 2007, individuals can save up to $2,850 for a single person and $5,650 for a family regardless of the health plan's deductible. The contribution is also indexed for inflation.
- Allowing individuals who enroll in an HSA-eligible health plan at mid-year to make a full-year contribution. Current law requires the plan to only allow a prorated HSA contribution after the plan year begins.
- Allowing individuals a one-time, tax-free transfer of amounts in flexible spending arrangements (FSAs) or health reimbursement arrangements (HRAs) for the purpose of funding an HSA.
- Allowing taxpayers to make a one-time distribution from an Individual Retirement Account (IRA) to fund an HSA, subject to HSA contribution limits.
For more information about HSAs, visit your local community bank or go to www.ustreas.gov.