Recognizing that changes to Flexible Spending Accounts can have a negative impact on a lot of people, legislators have introduced a measure into the Senate that could repeal provisions in health care reform. This bill could have a direct affect on two changes that we are currently facing with regard to these accounts:
Flexible Spending Account Changes in 2011
In the past, funds in one’s FSA were available for use in the purchase of OTC medications. A current change, that took place in January of this year, eliminates the availability of these funds for over-the-counter medications requiring participants to obtain a prescription in order to use their funds to pay for these medications. The question – how often will we want to go to our doctor to get a prescription for pain reliever, allergy medication, or cold medicine?
Flexible Spending Account Changes in 2013
Another anticipated change to Flexible Spending Accounts is the capping of the amount that one can put into their account. Currently, most plans have no limit to the contribution amounts, although many employers do cap employee contributions at around $5000. Beginning in January 2013, however, contributions to FSAs will be capped at $2500 per year, individually or for a family. Those with large medical bills or those who could use the tax break may be significantly affected by this change.
The bill introduced into the Senate could repeal the provisions of capping contributions as well as remove the provisions of excluding the use of one’s FSA to pay for their over-the-counter medications putting individuals back in charge of their accounts and eliminating the “in-flexibility” of our spending accounts.