Assigned to BI                                                                                                               FOR COMMITTEE

 

 

 

ARIZONA STATE SENATE

Phoenix, Arizona

 

FACT SHEET FOR H.B. 2513

 

salary adjustments; state employees

(NOW: medical savings account)

 

Purpose

 

            Requires the Department of Administration (DOA) to offer medical savings account (MSA) programs as an optional benefit program to employees of the state, political subdivisions, school districts and charter schools.

                                                 

Background

 

            Current law authorizes any resident of the state to establish an MSA. A MSA is a tax-advantaged non-profit account intended for medical expenses, offering a tax shelter, provider choices, long-term care protection and control over savings account money. Statute authorizes annual deposits from individuals or employers up to $2,000 per individual and an additional $1,000 for each dependent up to a maximum of $4,000. Individual MSA contributions are deductible for income tax purposes and withdrawals for eligible medical expenses are not subject to taxation. Withdrawals for other purposes are considered income, to be taxed accordingly and subject to a 10 percent penalty, unless made on the last day of the year.

 

The fiscal impact associated with H.B. 2513 is indeterminable at this time according to the JLBC and DOA.

 

Provisions

 

1.      Clarifies that DOA shall seek, designate and adopt performance standards for qualifying MSA programs.

 

2.      Authorizes DOA to expend public monies appropriated for the purpose of procuring qualified health care plans for MSA programs for employees of the state, political subdivisions, school districts and charter schools.

 

3.      Requires MSA health care plans to be statewide contracts.

 

4.      Requires DOA to identify and designate MSA providers to serve as MSA trustees.

 

5.      Provides that MSA trustees shall be financial institutions or insurance providers who serve as trustees for the tax-exempt MSA component of MSA programs.

 

6.      Prohibits DOA from procuring the MSA provider component of MSA programs.

 

7.      Authorizes DOA to administer and expend public monies for the insurance premiums of qualified health care plans for MSA programs.

 

8.      Requires qualified employees to pay for the health care insurance deductibles, trustee administrative fees and employee contributions to individual MSAs.

 

9.      Provides for a general effective date.

 

House Action

 

RGO                3/9/01              DPA/SE           7-0-1-2

APPROP         3/13/01            DPA/SE           9-0-2-5

3rd Read           3/21/01            DPA/SE           33-23-4-0

 

 

Prepared by Senate Staff

March 27, 2001