H.R. 436: Obama, House Republicans Duel Over FSA Use-It-Or-Lose-It Bill

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June 7, 2012 •

House Republicans may be heading toward a veto battle with President Obama over H.R. 436, a health package that includes the text of H.R. 1004 — a bill that would kill the much-loathed requirement that flexible spending account (FSA) holders forfeit any unused FSA balances at the end of the plan year.

The best-known provision in H.R. 436 would eliminate a 2.3% excise tax on medical devices that’s set to be imposed by the Patient Protection and Affordable Care Act of 2010 (PPACA).

To keep H.R. 436, the Health Care Cost Reduction Act package, from increasing the federal budget deficit, the Republicans have added a provision that would claw back any extra health insurance purchase tax credits that low-income and moderate-income taxpayers get as a result of implementation of PPACA.

The White House says President Obama’s senior advisors will recommend that he veto H.R. 436 if the bill reaches his desk.

PPACA is improving individuals’ health, giving American families and small business owners more control of their health care, and “ending the worst practices of insurance companies,” administration officials say in a policy statement.

The medical device excise tax would be a way for the health care system to share some of the extra sales revenue device makers get as PPACA expands access to health insurance and health care, and imposing stiff demands on low-income and middle-income families is is a bad way to fund industry tax breaks, administration officials say.

“Instead of working together to reduce health care costs, H.R. 436 chooses to refight old  political battles over health care,” administration officials say.

Rep. Erik Paulsen, R-Minn., says the core excise tax repeal provision in H.R. 436 would help the United States keep its lead in medical technology innovation.

“This new excise tax would force many companies to lay off workers, move jobs overseas, or worse yet, close their doors altogether,” Paulsen says.

Some Democrats, including Sens. Amy Klobuchar, D-Minn., and Al Franken, D-Minn., support the idea of repealing the excise tax.