Flexible spending accounts face hit in health care "reform"

[Better Believe It]

Flex spending accounts face hit in health overhaul
By ERICA WERNER
November 1, 2009

WASHINGTON – Those tax-free spending accounts that you and your co-workers use to help pay for dental work, insurance copayments or over-the-counter drugs face a hit under the health overhaul bills in Congress — unless a coalition that includes a powerful union, insurers and others can stop it.

Bills in the House and Senate would cap at $2,500 an employee's allowable annual contribution to a health care flexible spending account.

There is no federal cap on contributions now, though companies that offer the accounts — more than 80 percent of companies employing 500 or more workers do — typically impose their own limits, usually around $5,000.

Workers can use the accounts to save pretax income, which then can be used to reimburse a range of medical expenses, including dental and vision costs, prescription and over-the-counter medications and copays and deductibles — again without being taxed.

Capping contributions to the accounts would raise more than $13 billion over 10 years to help pay for Democratic health care legislation because it would limit the amount of employees' income that is exempt from taxation.

Our concern is that a cap of $2,500 is a definite tax on the middle class, particularly those with chronic illnesses," said Jody Dietel, executive director of Save Flexible Spending Plans and chief compliance officer at WageWorks, Inc. of San Mateo, Calif.

In addition, committee spokeswoman Erin Shields said the impact of the cap would be limited. "The provision, in addition to helping reduce the overutilization of care, also affects only a limited number of people," Shields said.

Read the complete article at:

http://news.yahoo.com/s/ap/20091101/ap_on_bi_ge/us_health_overhaul_flexible_spending

Posters note: My wife has a $3,000 flexible spending account which covers both of us. We blew right past that amount in September and would like to increase it to $4,000 for the next year. We're older so our medical expenses are higher than for most younger people. And we sure as hell did not "overutilize" health care, whatever the hell that means! What bull shit is being passed off as healthcare reform!

[dkf]

1. This is kind of stupid because it MAKES you spend money maybe

you didn't have to.

The one year I added to my medical spending account, I found out too late that the thing I had budgeted for wasn't on the list of eligible expenses. So I had to go out and find things to spend it on. That would be nice in this economy I am sure.

Well no $5000 lasik for me then. I've always planned to do it, but its just too expensive now.

[Better Believe It]

2. Every penny that I and my wife have spent has been for needed health care.

We didn't buy a new car or furniture with it!

And what kinds of medical treatment or drugs do you think constitute "overuse" of health care .... perhaps the kind enjoyed by those who want to reduce the amount one can put in a flexible plan?

They've got their true "Cadillac" insurance policies or they have tons of money and pay cash so screw us.

"This is kind of stupid because it MAKES you spend money maybe
you didn't have to."

Ya don't say. Like on what for example?

Why do you pick up and repeat these vultures arguments?

[dkf]

3. Um I was saying its stupid to cap it because you put away health care dollars

that in the end you are forced to spend.

My brother runs around every year trying to spend health care dollars that he didn't have time to use for his dental procedure or eye appointment. 2 years ago, he was desperately trying to spend a couple hundred dollars on New Years Eve.

In this environment of trying to get us to spend money, health care dollars you have socked away in a medical savings account is guaranteed stimulus money.

And yes, we haven't hit the age when we have blood pressure, cholesterol problems and other massive prescription bills, so our medical spending accounts are used for planned procedures that we could possibly put off, but that improve our lives.

[mkultra]

10. over use is when people go to the doctor when its not neccesary

This occurs frequently in America. Some things like a sprain, tenitis, and the flu are not really treatable.

My wife tries to take the kids to the doctor every time they get the least bit sick. I actually stopped her from taking our 4 year old in with conjunctivitis just this morning.

[cornermouse]

4. If you were planning a liposuction,

breast implant, lasik or some other optional surgery, flexible accounts might be useful. Otherwise, you're wasting your money and your time.

[NYC_SKP]

5. FSAs, Section 125s, are Bullshit. Health Care expenses should simply be deductible. Period.

The way it worked with my job was:

Let some third party corporation withdraw $X/month to shelter.

Make sure you save your receipts up the the total annual $.

If you spend more than your estimate, too bad.

If you spend less, too bad, they keep your money.

If you don't submit receipts for the amount, they KEEP THE $$$.

Bullshit, these could all be straight up deductible.

[Better Believe It]

6. Do you want to abolish FSA's before all health care expenses become deductible?

Not that would be absolute bull shit!

Until medical expenses are made deductible by the Obama Administration (are they even promoting that?) we'll just have to support FSA's and oppose the FSA cuts proposed under what is called heath care insurance "reform" legislation.

[NYC_SKP]

7. "Health Care expenses should simply be deductible. Period." Is what I wrote.

In the meantime bullshit FSAs are better than no deductions at all, of course.

[Better Believe It]

9. Thanks for the clarification. I agree with you.

[mkultra]

11. out of pocket medical expenses are deductable.

which is why FSAs are stupid. I deduct medical expenses every year.

[OhioBlue]

8. I agree - I lost money a couple years ago

b/c I didn't have enough expenses. We had a 2 month grace period after the first of the year... I was thinking it was 3 mos... would have stocked up on some allergy meds. But, I missed the window, lost the money. Straight up deductible makes the most sense. The way it is now, the 3rd parties are making interest off your money and sometimes keeping it.