Feds Modify FSA Use-It-or-Lose-It-Rule

Health flexible spending accounts (FSAs) are about get a bit more flexible. New federal guidance is to permit employers to let workers carry over unused amounts of up to $500 for expenses in the next year while still contributing up to $2,500 a year.

As you know, FSAs are voluntary account-based plans that help millions of Americans use pretax dollars to pay for eligible out-of-pocket health care expenses like prescription drugs, co-pays, and vision and dental costs. Unfortunately, you can’t yet use these pre-tax dollars at a “cash-only” clinic. That said, this is still positive health care news and definitely worth sharing.

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GOOD NEWS: Hatch-Rubio Bill Would Modify HSA, FSA Rules

“A new Republican Senate bill seeks to facilitate the use of tax-advantaged health savings accounts (HSA) and flexible spending arrangements by loosening the rules that govern them,” says a recent post from The Hill. On Thursday, Senate Finance Committee Ranking Member Orrin Hatch (R-Utah) and Sen. Marco Rubio (R-Fla.) introduced legislation to get rid of what they have labeled, “onerous” restrictions on HSAs. This would include the current ban that disallows the spending of HSA dollars on over-the-counter drugs tax-free.

This looks like great news for us as we’re trying to help people out of the insurance trap. As the host of Night Talker Radio Network said during a podcast with Dr. Doug, he doesn’t want to be 50 years old, paying $1,200 a month in case he gets a sore throat. A bill like this is one less shackle tying us to an entrenched, greedy system. It’s sure to cause a stir with opponents. We’re curious to see how they attack it, and are keeping an eye out for what other legislation is proposed within the bill. Obviously, based on the issues presented, we’re entirely on board.

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