LANSING ? The Small Business Association of Michigan urged state lawmakers to approve legislation that creates incentives for small business employers and employees to participate in Health Savings Accounts.
Scott Lyon, vice president of small business services for SBAM, presented testimony to the Senate Health Policy Committee in favor of SB 197 and SB 198. The bills will create state tax credits for contributions to an HSA plan.
?Passing these bills is a small step, but at the same time an important step, because it sends a message to the business community of Michigan that we are serious about fixing what is ailing our health insurance system,? he said. ?For us, it is simply a measure of tax equity. Health care contributions, whether they are employer premiums or contributions to an HSA by the employer or employee, should not be taxed at any level.?
HSAs combine a high deductible health insurance plan with an investment or retirement account from which money can be withdrawn, tax-free, to pay for medical care. Unused money in the account can accumulate with tax-free interest until retirement.
The cost of small business health insurance premiums has nearly doubled in the past four years, said Lyon.
?Changing to a high-deductible health plan, from a traditional low deductible health plan, will cut the premium cost substantially,? he said. ?HSAs lower premiums, but they do more than that. The whole point of an HSA is to put the consumer back in the game and in charge of their day-to-day spending decisions on routine care.
?HSAs will return health insurance to what it was designed to be ? a mechanism in place to prevent a medical catastrophe from becoming a financial catastrophe,? he said. ?With HSAs the money belongs to the individual, and when we are spending our own money we will learn to ask important questions about quality, necessity and the cost of care, which will bring some level of marketplace competition back into the system.?
For more information, click on SBAM.Org
