Letter on H.R. 6288, the "Retiree Health Accounts Act"
September 24, 2008
The Honorable John McHugh
United States House of Representatives
Washington, DC 20515
Dear Representative McHugh:
The U.S. Chamber of Commerce, the world's largest business federation representing more than three million businesses and organizations of every size, sector, and region, believes that H.R. 6288, the "Retiree Health Accounts Act," is a positive step towards creating new savings vehicles to help workers afford retiree health care.
Under this legislation, Retiree Health Accounts (RHAs) could be used by account holders to pay health insurance premiums, purchase prescription drugs, or even to purchase long-term care. The bill also creates a refundable tax credit for individuals who contribute to their RHAs, incentivizing responsible saving for health care expenses.
Early retirees need more options to obtain health insurance because they are too young to participate in the Medicare program but often no longer have access to employer-sponsored health care. In the current system, individuals can use tax-free funds to pay for current health care expenses, but may have difficulty saving sufficient amounts to pay for later health care expenses after they retire. The Chamber appreciates your commitment to creating a savings vehicle that workers can use to prepare for the costs of retiree health care, without being punished by taxes or fees for needing to withdraw the money for a medical emergency.
This legislation presents a good framework that answers the problems outlined above, and the Chamber looks forward to working with you and your staff to ensure the proposal maximizes benefits and minimizes administrative burdens. The Chamber thanks you for your leadership on this issue and looks forward to working with you and your colleagues to advance the goal of helping American workers save for, and afford retiree health care.
R. Bruce Josten