Brief Description: Requiring a study of public employee health plans and health savings account options.

Sponsors: Senate Committee on Ways & Means (originally sponsored by Senators Parlette, Hewitt, Zarelli, Brandland, Schoesler, Delvin, Mulliken, Johnson, Rasmussen, Benton, Roach, Oke, Benson and Stevens).

Hearing Date: 3/22/05

Staff: Dave Knutson (786-7146).

Background:

In 2003, Congress enacted Section 223 of the Medicare Modernization Act which allows people to establish health savings accounts (HSAs) to work in combination with qualifying high-deductible health plans (HDHP) to help finance medical expenses. A health plan qualifies as a HDHP if it has an annual deductible of at least $1,000 for individuals and annual out-of-pocket expenses (not premiums) that do not exceed $5,000.

HSAs are tax-free accounts that can be set up by individuals or employers. They are personal accounts that are owned by individuals, even when employers establish and contribute to them. Interest earned is not taxed, and funds that are not used may carry over to the following year.

Summary of Bill:

The Public Employees Benefits Board (PEBB) is directed to study options for offering an HSA/HDHP benefit to employees, including recommendations for a pilot project. The PEBB is to submit a report on its findings to the Legislature by December 1, 2005.

Appropriation: None.

Fiscal Note: Available.

Effective Date: The bill takes effect 90 days after adjournment of session in which bill is passed.