Posted Monday, January 24, 2011 -- 5:37pm
By Zac Schultz
DeForest: Governor Scott Walker signed his first bill into law Monday, removing the state income tax on health savings accounts.
Critics of this bill say it will do nothing to help businesses in Wisconsin save money but Walker says it will do more than that, it will help businesses keep good employees.
Shannon Kwiatkowski has worked at Evco Plastics in DeForest for 14 years. For the past two years, her health insurance plan has been an HSA, which stands for health savings account. "We use it for our co-pays for doctors appointments and stuff like that."
HSA's are a catastrophic insurance plan with a high deductible, usually around $5,000 a year for families. Employees put money in a health savings account to pay for medical expenses. "I just have a debit card and when we go to the doctor," says Shannon. "When we have a co-pay I just swipe the card and they take it right out of the account. It's like a checking account."
HSA's are federal tax free, and with Governor Scott Walker's signature they are now state income tax free. It's the first bill from Walker's emergency special session to reach his desk.
Critics say HSA's don't actually help businesses, because all the breaks go the workers. "By making it more affordable for employees, it makes it easier for employers to offer that as an option," says Walker.
Dale Evans is the President of Evco. He says all 300 employees have three options for health insurance and the HSA is the cheapest.
Even so, some of the youngest employees opt out. "Some of them have opted out and then got in an accident and different things. The HSA is really good for the young employees that want a cheap, something that's going to cover something that really goes bad."
Shannon can't imagine going without it. "It was really scary at first not having any thing to fall back on and having such a large deductible with two teenage daughters for myself I was really, really scared. Once I got into it and I understood it a little bit more, it's easier."