back April 28, 2005 Ryan Introduces Health-Care Legislation to Help the Uninsured and Small Businesses WASHINGTON – First District Congressman Paul Ryan, together with several House colleagues including fellow Wisconsinite Mark Green, has introduced legislation to help individuals without health insurance get affordable coverage and assist small businesses that contribute to employees’ Health Savings Accounts (HSAs). This legislation – H.R. 1872, the Health Coverage for the Uninsured Act of 2005 – builds on the foundation of a previously-passed law that established Health Savings Accounts which allow individuals with high-deductible insurance to set aside tax-free savings for lifetime health-care needs. It also eliminates the unfair tax bias in current law against individuals who purchase their own health-care coverage.  “The skyrocketing cost of health insurance is the biggest domestic crisis facing most Americans today,” Ryan said. “It affects our jobs, our economy, and our families’ way of life. We have to get a handle on this problem, and the legislation we have proposed will help make quality health care more affordable and accessible for Wisconsin families.” “With this legislation, we are honing in on the problem of the uninsured by helping those who currently fall through the cracks: those who aren’t covered through their employer, the self-employed, and small businesses that can’t afford to offer coverage,” Ryan said. “Many Wisconsinites are already finding that HSAs help them afford quality coverage for themselves, their families and – in the case of small business owners – their employees. This legislation improves on HSAs and helps overcome barriers that prevent people from obtaining insurance.”  Ryan’s proposal has three main parts: Premium deductibility. The legislation would allow an individual who purchases a high-deductible health plan (HDHP) combined with an HSA and does not receive health insurance through their employer (or any government program) to deduct from his or her taxable income the amount of the premium.  Small business tax credit. Under this proposal, small businesses of up to 100 employees would receive a refundable tax credit for contributions they make to their employees’ health savings accounts (up to $200 for a contribution into an individual HSA or $500 for a family HSA.) In order to be eligible for the credit for contributions to HSAs, the employer must offer a group HDHP. Low-income tax credit for the purchase of health insurance. In order to help low-income people get coverage, the legislation provides a subsidy of up to 90% of the cost of their health insurance premium – up to $1,000 for an individual or up to $3,000 for a family plan. This credit would be refundable, advanceable, and assignable – meaning the money would go straight to the insurer of their choice to pay for their health care, on a monthly basis.  The following examples demonstrate how the tax benefits provided by this legislation would assist individuals and small businesses and help the uninsured afford health-care coverage: Jane works for a mid-sized corporation that does not offer health benefits. She must look on the market. She finds a high-deductible health plan that she can afford and buys the policy – she is to pay $100/month for her premium. She also opens an HSA since her HDHP qualifies her for that benefit. Any money she puts into the HSA is already deductible under current law. But when this legislation becomes law, she will also be able to deduct the $1,200 she pays in premiums each year. Jim owns and operates a small shoe store that has 12 employees. He recently found a HDHP that he can offer to his employees. It costs a lot, but he is able to deduct the money that he spends on the insurance. His employees are grateful for the coverage, but they don’t have a lot of money to put away in their HSAs to cover health expenses. Jim hears about the tax credit that this legislation offers if he puts some money in his employees’ HSAs for them. Under this legislation, if Jim puts $200 each year in each employee’s HSA, he will get a $2,400 credit at the end of the taxable year.  Susie and Tom have two children and need to purchase health insurance. Tom makes $25,000 a year, and Susie stays at home with the kids. They hear about the tax credit provided for by this legislation and find out they would be eligible for a $3,000 credit ($1,000 for each adult and $500 for each child, with a maximum of two children.) They shop around and find that one insurer can give them a HDHP plus an HSA for $3,300 a year. They purchase it and get an advance credit based on last year’s tax return. They would pay their portion of the monthly premium ($300 per year), and the health insurer would be reimbursed directly by the U.S. Department of Treasury for its portion ($3,000 per year).   Print Contact: Kate Matus (202) 226-7326