House Votes to Repeal Medical Device Tax and Restrictions on Health Savings Accounts

Washington, Jun 8 -

Click here for entire Capitol Connection Newsletter  One of the myriad of tax increases included in President Obama’s health care overhaul is a 2.3 percent excise tax on manufacturers and importers of most medical devices. This tax, scheduled to take effect in 2013, will hit California especially hard, as medical device manufacturers employ over 72,000 workers in the Golden State. At a time when unemployment remains above 8 percent and hiring is slowing, it makes no sense to institute onerous taxes that will destroy good-paying jobs. This tax will also harm the quality of health care by decreasing capital that medical device companies need to research, develop, and manufacture new life-saving technologies.

This week, the House passed H.R. 436, the Health Care Cost Reduction Act, which repeals the excise tax on medical device manufacturers. In addition, it lifts the health care law’s restrictions on individuals with health flexible spending arrangements (FSAs) or health savings accounts from using funds to pay for over-the-counter medications without a prescription. H.R. 436 also gives Americans with these accounts a 7-month grace period after the end of a plan year to recover up to $500 in unused contributions. Current law requires any remaining amounts in a health FSA to be forfeited. As a co-sponsor of this important legislation, Congressman Miller hopes that the Senate will take up the legislation quickly to prevent this job-destroying tax increase from harming job creation, medical innovation and give patients greater control over their health savings accounts.