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Health insurers get HIT tax suspension for another 2 years

The House passed two bills to suspend the health insurance tax and expand the use of health savings accounts.

Susan Morse, Senior Editor

The House this week passed two bills that delay the health insurance tax for two years and expand health savings accounts, measures applauded by insurers.

Suspension of the tax is aimed at keeping premiums from rising, though is also seen as a political maneuver ahead of the midterm elections.

America's Health Insurance Plans called the HIT a 40 percent excise tax on insurers. The tax was already suspended for 2019. HR 6311 extends that to 2020.

If the tax is allowed to resume in 2020, the Congressional Budget Office estimates it would impose $161 billion in higher costs to consumers over the next 10 years, AHIP said.

"We applaud the House for passing these important bipartisan proposals. They will make healthcare more affordable by suspending taxes that push up premiums and modernizing HSAs so pre-tax dollars can be more effectively used to meet the healthcare needs of American families," said Matt Eyles, president and CEO of AHIP.

HR 6311 and HR 6199, which also passed the House this week, expand the use of HSAs and about doubles their contribution limits.

The legislation repeals a provision of current law that prevents money from HSAs and flexible spending accounts from being used to purchase over-the-counter drugs.  It allows bronze and catastrophic plans to automatically qualify as HSA-eligible plans.

Twitter: @SusanJMorse
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