An initiative being proposed by Congress could steer billions of dollars of new savings towards credit unions as trustees of tax-free medical savings accounts for public employees.
Rep. Gil Gutnecht (R-MN) said last week he will introduce legislation next month that would create a pilot program in Minnesota under which public employees could set aside tax-free funds in their credit unions that would help them pay for health care costs after they leave the public system.
The plan is aimed at coverage for older state employees who are approaching retirement age and tend to have a greater need for health care, said Gutnecht.
If the program, being called Medical Savings Accounts, or MSAs, works in Minnesota it could be expanded nationwide, Gutnecht said last week during a news conference announcing the initiative. Credit unions, he said, would be an ideal trustee for the funds because so many public employees are members, he added.
"Credit unions are a natural agency to administer this program," said Dean Nelson, president of City/County FCU in St. Paul, who appeared with Gutnecht at the news conference. "Currently a large percentage of public employees are already members of a credit union."
"The accounts would supplement health insurance costs for workers 45 and over," said Stephanie Brand, a spokesperson for Gutnecht, who credited the Minnesota CU Network and the Minneapolis Police Relief Association with helping design the initiative
Rep. Gutnecht plans to introduce the bill when Congress returns from its summer recess in September and is discussing the initiative with other potential co-sponsors, said Brand.