House Committee Takes Aim at Cadillac Tax and Employer Mandate, Advances HSA Flexibility Bills

Federal Health Care Reform

The House Ways and Means Committee advanced several health tax bills that would retroactively suspend the ACA's employer mandate, further delay implementation of the Cadillac tax for one year, and make substantial changes to health savings accounts (HSAs).

Delaying ACA taxes: The Cadillac tax, originally scheduled to take effect in 2018, has since been delayed twice.  H.R. 4616 would delay it a third time from 2022 (its current implementation date) to 2023.  The estimated cost of the bill, which would also suspend the employer mandate, would be $39.5 billion over 10 years.  The bill advanced along party lines.

Bills expanding the use of HSAs include:

• H.R. 6301, to permit wider use of HSAs by those with high-deductible health plans;
• H.R. 6305, to strengthen HSAs and flexible spending accounts (FSAs) in the workplace;
• H.R. 6306, to effectively double HSA contribution limits;
• H.R. 6309, to expand HSA eligibility to working seniors; and
• H.R. 6317, to expand HSA uses to include direct primary care.

Outlook: The bills have not yet been scheduled for consideration by the full House, but, if passed, Democratic opposition is likely to stall efforts in the Senate.  Democratic opponents on the House committee complained that the HSA bills would primarily help wealthy individuals without providing a budgetary offset, “simply widening an already great economic gap in this country,” according to Rep. Lloyd Doggett (D-TX).