MEMORANDUM

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To: Coalition Members and Opinion Leaders

From: Dan Perrin

Re: Evolution Benefit’s Efforts to Impose Substantiation on HSAs

 

Date: April 8, 2008

1) Evolution Benefits has a patent on an aspect of the process for substantiation, which is why they proposed that annual HSA “reporting” requirements be imposed on all banks that have Health Savings Account deposits. Forcing everyone to use their patented process, they believe, is a good business strategy, for them.

2) It is impossible to report non-qualified expenses without substantiation, as any banker in the HSA business can tell you, so protestations to the contrary by Evolution Benefits that they just suggested annual reporting, stretch credibility, especially given their patent and financial stake in this outcome.

3) The revenue score by Joint Taxation Committee is too high to be explained by just non-qualified expenses being stopped. The score, which is an estimate of revenue created by imposing substantiation can only be explained if joint tax assumes, correctly, that HSA adoption will be significantly and dramatically impacted negatively.

4) Therefore, anyone who believes this proposal is anything other than an attempt to slow and reverse HSA adoption, impose corporate controls on how Americans with HSAs can spend their own money, and enrich Evolution Benefits on the backs of American taxpayers faced with new monthly fees, is wrong. The Ways and Means Committee proposal, which is being pushed by the number one HSA opponent on the Committee, Representative Stark, simply believes this is a great way to raise money and hurt HSAs.

5) Please see the policy brief by the U.S. House Republican Study Committee, which is excellent.