In an effort to help small businesses and their employees cover health care costs, U.S. Senator Mike Enzi, R-Wyo., introduced legislation yesterday to create a new kind of tax-exempt savings account which would provide more choice and flexibility.
Similar to a traditional Health Savings Account (HSA) in the contribution limits and structure, the new Small Business Health Accounts would be available for employees of a small business to set aside money on a pre-tax basis to help cover health insurance and other health care expenses.
Unlike an HSA, Small Business Health Accounts could also be used to pay health insurance premiums and would provide flexibility by not requiring the employee to pair it with a High Deductible Health Plan. And the account could be rolled over into a traditional HSA if the individual no longer qualified under a small business designation.
“The new Small Business Health Accounts are consumer friendly,” Enzi said. “This legislation takes the idea of Health Savings Accounts, which have been growing in popularity, and expands on them to provide more freedom. Simply put, these new savings accounts provide more choice and flexibility for employers and employees to help them manage their health care costs.”
Click here for a copy of the legislation.