Seven states have no tax exemption for Health Savings Accounts (HSAs), the Los Angeles Times reports.
The states without a tax break for HSAs are Alabama, California, Maine, Massachusetts, New Jersey, Pennsylvania, and Wisconsin, according to the newspaper.
In California, lawmakers have proposed legislation that would exempt HSAs from the state's income tax, but no such legislation has passed since the federal government created HSAs in 2004.
"It's going to hit people between the eyes," says California Assemblyman George A. Plescia, a Republican from San Diego .
To be eligible for HSAs, workers must be enrolled in a high-deductible health plan. More than 3 million people are enrolled in high-deductible health plans that qualify for health savings accounts (HSAs), according to America 's Health Insurance Plans (AHIP), a trade association. However, it is still unclear how many workers have opened and contributed to an HSA.