Bush proposes expansion of health savings accounts as funding tool for retirees.(News)

Byline: JERRY GEISEL

WASHINGTON-Health savings accounts would be expanded to serve as a tax-effective retiree health care funding vehicle under a proposal unveiled last week by President Bush.

The proposal would allow employees and employers to increase HSA contributions significantly, creating a much bigger pot of money to draw on for retiree health care expenses.

Under current law, the maximum permitted contributions are so low that there is limited ability for employees-after paying for uncovered current year medical expenses-to build up balances in their HSAs.

"The reality is that the maximum contribution permitted is so low as to constrain those who are serious about saving'' to meet future retiree health care expenses, said Randy Abbott, a consultant in the …