Health Care Reform Restricts Flexible Spending Accounts
The recently passed health care legislation will impact flexible spending accounts (FSAs) in two ways. First, starting on January 1, 2011, participants will need a doctor’s prescription in order to use their FSA to pay for over-the-counter (OTC) medications such as allergy medicine and cough syrup. Second, beginning on January 1, 2013, contributions to FSAs will be capped at $2,500 per year. While the hard work of FSA supporters successfully prevented this benefit from being eliminated, the fight to preserve FSAs is likely to continue in the coming years.
Currently, there is an effort underway to eliminate or, at a minimum, push back implementation of the OTC restriction until 2013. Click here to learn more and contact your elected representatives about this issue.
Moving forward, it is critical to better educate elected officials about the use of FSAs as a valuable budgeting and cost-saving tool. Among the millions of Americans who rely on the benefit to better control their health care regime and treatment, FSAs are particularly valuable for individuals and families battling chronic conditions who require ongoing care and medical supplies.
President Obama and Congress should protect FSAs from any additional restrictions 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.
FSA participants spend frivolously on unnecessary purchases.
FACT:
More than 90 percent of expenses are spent for provider services and prescription co-pays. Just eight percent is spent on over-the-counter expenses, and many of those dollars go for medications that were, until recently, available only by prescription.
