FSA advocate argues limited relief gained in updated Baucus bill

More than a dozen amendments were filed this week by members of the Senate Finance Committee to protect flexible spending accounts (FSAs). Although a redrafted version of Chairman Max Baucus’ “America’s Healthy Future Act of 2009″ includes a raised cap of $2,500 on annual tax-free contributions to FSAs – initially proposed last week at $2,000 – advocates for the benefit say the “unreasonably low” cap appears to be “discriminating against FSAs which, unlike other provisions in the bill, is not indexed over time.”

According to Save Flexible Spending Plans, a national grassroots advocacy organization, the legislation as introduced by Sen. Baucus imposes a cap on contributions that – unlike other provisions in the legislation – would not adjust with inflation. The legislation also proposes limiting the use of the benefit for over-the-counter medications without a doctor’s prescription and including FSAs together with major medical plans in an excise tax on high-cost insurance plans.