Health Care Reform Proposals Could Threaten Flexible Spending Accounts

Separate versions of health care reform legislation approved by the Senate and House of Representatives in 2009 would have drastically restricted the use of flexible spending accounts (FSAs) in order to fund a small portion of reform efforts.  While public apprehension forced Congress to temporarily put these legislative proposals on hold, reform efforts have resumed with the recent introduction of President Obama’s health care reform proposal.

Just as legislation approved by the Senate and House proposed, President Obama’s health care reform proposal would restrict FSAs by imposing a $2,500 cap on FSA contributions.  This policy approach would force millions of Americans to pay higher taxes and health costs at a time when many can least afford it. 

Among those most impacted by the proposed FSA restrictions are many Americans who need the program the most – individuals and families battling chronic conditions that require ongoing care and medical supplies. Beyond their use as a valuable budgeting and cost-saving tool, FSAs enable users to take responsibility for their health care and access the services they need to stay healthy.

President Obama and Congress should protect FSAs from becoming the unintended victim of a health care reform effort and allow the program to continue to serve as a safety net and solution for millions of Americans to cover their out-of-pocket health care expenses.