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ICBA Supports Bill to Beef Up Health Savings Accounts

Consumers Expressing Interest in HSAs Prefer to Use a Bank

Washington, D.C. (May 3, 2006)—The Independent Community Bankers of America (ICBA) applauds Rep. Eric Cantor (R-VA.) for his plan to enhance health savings accounts (HSAs) by offering greater flexibility and tax advantages to small businesses and consumers.

"Rep. Cantor's enhanced tax relief and savings provisions are a win-win for small businesses, individuals and community banks interested in offering HSAs," said Camden R. Fine, ICBA president and CEO. "Small businesses can offer their employees greater access to health insurance while individuals will have more choices and more flexibility than ever before by using enhanced tax-advantaged health care accounts."

"More and more community banks are offering HSA deposit accounts for their individual and small business customers. Now community banks can give their customers a full-range of financial products and services, including savings accounts for health care," said Fine.

Rep. Cantor's legislation, the "Tax-Free Health Savings Act" (H.R. 5262), includes provisions to increase HSA contribution limits, make premiums for HSA-compatible insurance tax deductible, and provide a low-income tax credit for the purchase of HSAs.

Of note, 60 percent of consumers who expressed an interest in HSAs would rather use a bank to deposit and manage their account, according to a recent survey by Synergistics Research Corp., an Atlanta, Ga., financial research firm.

ICBA looks forward to continuing to work with Congress and the administration to further advance beneficial HSAs.