ERIC urges Senate to expand HSAs, repeal Cadillac tax

The ERISA Industry Committee (ERIC) has submitted a letter to the Senate Finance Committee urging it to use health care reform as a vehicle to improve consumer-driven options, reduce health care taxes, and improve public sector programs to focus on value.

In its letter, ERIC praised the Committee for its work to advance the use of health savings accounts (HSAs) and flexible spending accounts (FSAs) and asked the Committee to support the House’s bill, the American Health Care Act (AHCA), to nearly double the annual limitation on contributions to HSAs allowing workers to save more money.

To improve consumer-driven health options, ERIC also encouraged the Committee to:

  • fix the tax code to ensure that HSA and high-deductible health plan beneficiaries have access to supplemental benefits;
  • allow consumers to use their health accounts to purchase over-the-counter medicines for the treatment of common ailments; and
  • update rules to ensure those enrolled in HSA-compatible plans can benefit from first-dollar coverage for prescription drugs and other medical products and services likely to prevent or reduce catastrophic episodes later.

Cadillac tax.

The letter also recommended that the Committee repeal some of the taxes put in place by the Patient Protection and Affordable Care Act (ACA). ERIC would like Chairman Orrin Hatch (R-Utah) to cosponsor the “Middle Class Health Benefits Tax Repeal Act of 2017″, and also support an amendment to completely eradicate the Cadillac tax on employer-sponsored health benefits.

“The single most dangerous threat to employer-sponsored health benefits is the 40 percent ‘Cadillac’ excise tax. This tax on benefits will cause benefits to degrade in quality while growing much more expensive to plan beneficiaries at the same time,” said Annette Guarisco Fildes, president and CEO of ERIC. “The Cadillac tax will eventually consume all health care plans, putting women, seniors, low-income families, the disabled, and traditional employers with diverse workforces at a dangerous disadvantage.”

In addition to repealing the Cadillac tax, the letter asked for the elimination of other ACA-created taxes and the removal of unnecessary and burdensome reporting requirements.

Value-based care.

ERIC requested that the Committee take steps to implement value-based care and market-based strategies in public programs-including value-based payment, transparency, consumer engagement, and data-driven quality improvements-that have the proven potential to incentivize high-quality patient care.

“Value-based care helps to drive government efficiency, effectiveness and accountability. By advancing value-driven care within the public sector, which insures about 100 million Americans, we can improve care while also saving significant amounts of taxpayer dollars,” said Guarisco Fildes.

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