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| Legal & Regulatory Reform |
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New Federal Health Care Subsidy Available
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New Federal Drug Subsidy Available
Under Medicare reform legislation enacted in 2003, employers providing prescription drug benefits to retirees may be eligible for partial federal subsidies beginning in 2006. Employers wishing to take advantage of these subsidies in 2006 must apply by September 30, 2005. Application procedures and forms will be finalized later this spring. AMT will continue to monitor implementation of this new program, and will post relevant developments here. To receive an information packet on this program (which will include a federal agency point-of-contact), please email AMT's Government Relations Department at athomas@amtonline.org.
President Bush Introduces Health Care Proposals
In January, President Bush unveiled his plan to make health care more affordable to all Americans. The President's proposals, detailed on a one-page fact sheet, include Association Health Plans (AHPs) and a tax credit for small business owners' contributions to employees' Health Savings Accounts (HSAs). (See related background information on HSAs below.)
Association Health Plans -Overview
One solution to runaway medical costs lies in a federal legislative proposal that would free associations such as AMT to sponsor health care plans for their members. On February 2, 2005, House Employer-Employee Relations Subcommittee Chairman Sam Johnson (R-TX) led a bipartisan group of legislators in introducing the Small Business Health Fairness Act (H.R. 525). The measure allow companies to band together through associations, like AMT, and purchase quality employee health care at lower cost. The bill is strongly supported by President Bush. Passage of Association Health Plans (AHP) legislation is a top government relations priority for AMT.
Health Savings Accounts (HSAs)- Overview
HSAs allow employers to pair high-deductible health care plans (which have the advantage of lower premium costs) with separate, tax-advantaged accounts in order to pay employee health care expenses. An employer, employee or both could contribute into such designated accounts, with tax-free contributions, earnings and withdrawals when used for employee medical expenses. As with 401(k) plans, funds accumulated in HSAs become the property of the individual, thus creating an incentive for an employee to exercise judgment in making personal cost/benefit decisions. The U.S. Department of the Treasury answers the most frequently asked questions about HSAs on its website. Treasury also issued a one-page brief on HSAs on December 22, 2003. HSAs are an entirely new benefit option – legal for offering only since January 1, 2004 – and AMT continues to actively explore the various aspects of HSAs on behalf of its members.
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Tags/Labels:
Government Policy,
Human Resources, Compensation, Workforce Development
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