For Americans with high medical expenses, flexible spending accounts (FSAs) have consistently proven to be an effective vehicle for helping reduce out-of-pocket costs of care by up to 40 percent.
However, because of the "use it or lose it" provision, which mandates that participants spend down the entirety of their FSAs by the plan year's end, many consumers have been wary to enroll in these accounts for fear of losing their hard-earned dollars.
That's an unnecessary penalty, according to Senators Ben Cardin (D-Md.) and Mike Enzi (R-Wyo.), who recently introduced bipartisan legislation, the Medical Flexible Spending Account Improvement Act (S. 1404), to remove this forfeiture rule.
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According to Sen. Cardin, "It's time we stopped penalizing participants for being efficient in the use of their health care dollars and allow for a sensible cash-out option at the end of each program year. It is both fair and sound health policy."
A companion bill was also introduced earlier this year in the House by Representatives John Larson (D-Conn.) and Charles Boustany (R-La.).
As I mentioned in a previous post, an end to the forfeiture rule would be a win-win for plan participants and employers alike. So it's great to see that interest in this issue is gaining traction in Congress.
Even when it seems that the political atmosphere in Washington is dysfunctional, the Cardin-Enzi bill shows us that bipartisan cooperation and common sense are still possible.
To learn more about the Cardin-Enzi bill and voice your support for its passage, please visit www.savemyflexplan.org. Ultimately, the best way to make sure common sense legislation becomes common sense law is to have a voice in the process. The tools available here allow you to quickly email your elected representatives in support of the pending bills.
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