Following the introduction of the Patient Protection and Affordable Care Act by Senate Majority Leader Harry Reid (D-NV), Joe Jackson, chairman of Save Flexible Spending Plans and CEO of WageWorks Inc., a San Mateo, CA-based benefits provider issued the following statement:
“It is disappointing that the Senate is determined to fund health care reform by restricting access to flexible spending accounts (FSAs), a valuable benefit relied upon by more than 35 million Americans to help hold down health care costs. Severely curtailing the use of FSAs will not only force participants to pay more in health care costs, it flies in the face of President Obama’s pledge to not raise taxes on the middle class.
Especially damaging to plan participants is the Senate bill’s failure to index an already unreasonably low $2,500 cap on FSA contributions. Failing to adjust the cap for inflation will cause the value of a $2,500 FSA to plummet to less than half that amount within a decade.
Initially, the Senate will force approximately seven million hard-working Americans who use their FSAs to cover out-of-pocket health care expenses greater than $2,500 to pay higher taxes and health care costs. Federal employees who currently enjoy a $5,000 limit on FSA contributions will see their access to FSAs cut in half. Additionally, state employees in 46 states who currently have FSA contribution limits set at $3,000 or more will be negatively impacted. Sadly, those with the highest out-of-pocket health care costs — the sickest — will be hit the hardest by restrictions on FSA use.
The bottom line is FSAs work and should be persevered. They empower millions of Americans to play a more active role in managing their health care and getting the care they need while keeping costs down — a major goal of health care reform.”
About Flexible Spending Accounts
Flexible spending accounts 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.
Individuals and families with chronic illnesses typically receive the most benefit from FSAs. They incur annual out-of-pocket expenses averaging $4,398 per year, the Robert Wood Johnson Foundation found — well above the proposed limit. Approximately 44 percent of Americans have one or more chronic conditions.
About Save Flexible Spending Plans
Save Flexible Spending Plans is a national grassroots advocacy organization that protects 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.
Source: Save Flexible Spending Plans