Greensboro, NC (PRWEB) April 12, 2008
Easy Benefit Statements (EBS) strongly opposes any proposal that would require substantiation of Health Savings Account (HSA) withdrawal transactions or any radical change to the current administration of HSAs.
HSAs are a dynamic, consumer-friendly and increasingly popular health insurance product enjoyed by millions of Americans. Current law already requires individuals with an HSA to keep and supply receipts to the Internal Revenue Service when requested. It is the individual's responsibility to keep good tax records--through self reporting--just as they do with charitable contributions and other tax deductions.
Imposing substantiation rules on HSAs will add enormous costs to HSAs, which will inevitably be passed on to the consumer. One of the benefits of consumer-directed health care products like HSAs is the removal of unnecessary overhead from the health care process, which has proven to lower administrative costs. Right now, 90% of HSA withdrawals are done electronically through a debit card, ATM or check. The same proportion (90%) of withdrawals from an FSA is done by paper/manually. Adding this new requirement would bring HSAs back into the world of paper/manual transactions thus increasing costs and making it more burdensome for the consumer.
HSA substantiation also fails to recognize that HSAs and Flexible Spending Accounts (FSAs) are inherently different products and should not be treated the same. The HSA is an individually owned account and FSAs are an employer group-owned account. Substantiation of FSAs currently benefits employers because they get to keep any unused funds in their employees' FSA accounts at the end of the year. However, unused funds in an HSA accrue for future health care expenses for the account holder.
HSAs place significant responsibility with the account holder, which is an attraction for the beneficiary and the employer. Ironically, at a time when Congress is seeking to enhance the use of Health Information Technology to help reduce costs and improve quality, efforts to radically change the oversight and administration of HSAs in such a way would be a giant leap backwards.
Requiring substantiation on HSA transactions is a bad idea that would lead to a significant decrease in electronic transactions, longer wait times for reimbursement for individuals and higher administrative costs. We look forward to working with Congress and the administration on making the cost of health care more affordable for all Americans (not less) because insuring more Americans is in everyone's best interest.
Easy Benefit Statements provides simple, effective software to human resource managers and benefit consultants to create personalized employee benefit communication tools. For more information contact J.J. Summerell at 877.282.3303 or jjsummerell(at)easybenefitstatements.com
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