/PRNewswire/ -- Following the introduction of health care reform legislation last week by Sen. Max Baucus (D-Mont.), more than a dozen amendments were filed this weekend by members of the Senate Finance Committee to protect flexible spending accounts (FSAs) -- a valuable benefit used by millions of Americans to manage and hold down their health care costs. As reemphasized in updated legislation introduced today, Sen. Baucus proposes to restrict the use of FSAs to help cover a portion of the costs of health care reform.
America's Healthy Future Act, as introduced by Sen. Baucus, contains provisions that would drastically restrict the use of FSAs primarily by imposing a $2,500 cap (initially proposed last week at $2,000) on contributions that - unlike other provisions in the legislation - would not adjust with inflation. The legislation also proposes limiting the use of the benefit for over-the-counter medications without a doctor's prescription and including FSAs together with major medical plans in an excise tax on high-cost insurance plans.
"It's disappointing that Sen. Baucus has focused his sights on restricting the use of flexible spending accounts through an unreasonably low cap on contributions. He appears to be discriminating against FSAs which, unlike other provisions in the bill, is not indexed over time," said Joe Jackson, chairman of Save Flexible Spending Plans and CEO of WageWorks, a benefits company based in San Mateo, California. "Without a change, many who rely on flexible spending accounts, including individuals and families battling chronic conditions with high out-of-pocket costs, will lose the full value of the benefit and be forced to pay higher taxes and health care costs."
Amendments filed by Senate Finance Committee members included proposals to increase or remove the originally planned $2,000 contribution cap, exclude FSAs from the excise tax on high cost health insurance plans and clarify the reimbursement role of FSAs for over-the-counter medications.
"We are encouraged that eight Senators from both sides of the aisle filed amendments to protect a benefit that has helped millions of hardworking Americans manage and hold down their health care costs," said Jackson. "At a minimum, amendments filed that would increase the cap on FSA contributions, including those by Senators Schumer and Snowe, represent a step in the right direction. Without a higher cap, Congress could force plan participants, including many fighting chronic illnesses, to forgo necessary medical treatment, prescriptions and supplies for financial reasons, resulting in a deterioration of health and an increase in hospitalizations and overall health care system costs."
About Flexible Spending Accounts
Flexible spending accounts (FSAs) are voluntary, account-based plans that enable millions of Americans to use pre-tax dollars to pay for eligible out-of-pocket health care expenses like prescription drug co-pays, vision and dental costs, office visits and medical supplies. Most FSA participants are middle income, earning approximately $55,000 annually. Currently, limits on contributions to FSAs are set by individual employers.
In July, the House Ways and Means Committee approved health care reform legislation that includes a ban on using money set aside in FSAs to buy over-the-counter medications such as aspirin and allergy medications.
About Save Flexible Spending Plans
Save Flexible Spending Plans is a national grassroots advocacy organization protect against the restricted use of flexible spending accounts in health care reform efforts. The campaign is sponsored by the Employers Council on Flexible Compensation (ECFC), www.ecfc.org, a non-profit organization dedicated to the maintenance and expansion of private employee benefit programs on a tax-advantaged basis. To learn more, take action and read the personal stories of FSA participants, please visit www.savemyflexplan.org.
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