Will New IRS Tax Rules Put Health Care Consumers in the Driver’s Seat?
POLICY FORUMWednesday, July 10, 2002
12:00 p.m.
Featuring Rep. Jim DeMint, R-South Carolina; Paul Fronstin, Employee Benefit Research Institute; Charles Klippel, Aetna; Doug Kronenberg, Lumenos; and Michael Showalter, Definity Health.
The Cato Institute
1000 Massachusetts Avenue, NW
Washington, DC 20001
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On June 26, the Treasury Department and the Internal Revenue Service issued long-awaited guidance that clarifies the tax treatment of health reimbursement accounts (HRAs). The new rules allow unused funds in tax-advantaged, employer-funded health accounts to be carried over to later years, without any “use-it-or-lose-it” penalties. Advocates of consumer-driven health care options say this will encourage employer-sponsored health plans to rely less on comprehensive insurance, provide employees with greater choice and control over their health spending, and stimulate the growth of defined-contribution health plans. Our panel will examine the health policy implications of the new tax rules, assess future prospects for consumer-driven health care, and discuss future policy alternatives and strategies.