Senate passes HR-3590 - "Patient Protection and Affordable Care Act" on 12/24/2009.

On December 24th, the Senate passed their version of healthcare reform entitled the "Patient Protection and Affordable Care Act" along a strict party-line vote of 60-39.  Similar to the House version, the Senate version, limits Health Flexible Spending Accounts (FSAs) to $2,500 annually starting January 1, 2011.  The House version limits FSA to $2,500 annually starting January 1, 2013.   The Senate version also limits over-the-counter medications except as prescribed by a physician starting January 1, 2011.  The House version removes over-the-counter medications completely, even if prescribed by a physician starting January 1, 2011.

A further concern for Flexible Spending Accounts will be the effect of the Senate's excise tax on "High Cost" insurance plans because the value of FSAs will be included in that calculation.

ProBenefits will be hosting a webinar as more details emerge from the Conference Committee which is tasked with merging the House and Senate bills together.

New Report:  Senate Finance Committeee Bill (Baucus Bill) Will Effectively Eliminate FSAs.

A new report by the Republican staff of the Joint Economic Committee discusses why health care reform legislation approved by the Senate Finance Committee will effectively eliminate Flexible Spending Accounts (FSAs). The document can be found here: Link

Flexible Spending Accounts (FSAs) help individuals and families to pay for out-of-pocket medical expenses that are not covered by their health insurance plans with tax-free dollars.

FSAs are particularly important for individuals and families who have high medical expenses, such as seniors, and those with chronic health conditions or disabilities. The option of using tax-free dollars can reduce their out-of-pocket medical expenses by 20% to 40%. 

Legislation recently approved by the Senate Finance Committee will not only limit allowable FSA contributions, but the fact that the limit is not indexed for inflation means that the inflation adjusted or "real" value of an FSA will decline steadily over time until virtually worthless.

Second, as employers and insurance companies seek to avoid paying the bill's proposed 40% excise tax on high cost plans, employers will be incentivized to reduce the allowable level of FSA contributions OR to eliminate the plans altogether.

ProBenefits Hosts Second Webinar on Health Care Reform - September 23

ProBenefits hosted a second webinar update on Health Care Reform on Wednesday, September 23. This session included an update on the health care reform process, including specifics about the newly released Senate Finance Committee bill that was introduced 9/16. View slides from the presentation here.

Opinion Article by ProBenefits President Gary Knight Published in the Winston-Salem Journal - September 5th

ProBenefits President and Owner Gary Knight submitted an opinion article to the Winston-Salem Journal regarding Flexible Spending Accounts. Entitled "Flexible spending accounts and tax savings in jeopardy," it was published in the Journal on Saturday, September 5th. Read the full article here.

ProBenefits Places Ad in the Winston-Salem Journal - August 30th & 31st and September 6th & 7th

ProBenefits purchased ad space for four days in our local newspaper, The Winston-Salem Journal, to run an ad in support of Flexible Spending Accounts. We included the story of a local FSA participant who depends upon her FSA to help cover her family's medical expenses, and we directed concerned readers to www.savemyflexplan.org to share their own stories and contact their congressional representatives. You can view the ad in PDF format here. We also mailed copies of the paper to our congressional representatives, encouraging them to help prevent capping or eliminating Flexible Spending Accounts.

Updates from August 1-19

The Senate and the House both are in recess without acting on a bill. We have watched the public display of emotion at many town hall meetings with interest. Meanwhile, the staffs on the Hill are still busy at work.

We continue to hear that a $2,000 cap on FSAs is likely to be part of a Senate Finance Committee bill. ProBenefits and other industry groups are actively reaching out to emphasize that FSAs are an important health care tool for both employers and their employees. FSAs help Americans afford their out-of-pocket health care costs. Even under a reformed health care system, patients will still face out-of pocket expenses and we need FSAs to help us afford these expenses. Further, capping FSAs will disproportionately hurt those with chronic conditions who tend to face high out-of-pocket costs.

It is also believed that a FSA cap will be part of the over-all 'excise tax' that may be proposed by the Senate Finance Committee. We believe that including FSAs in the calculation of the excise tax threshold will cause employers to scale back or eliminate FSAs (and potentially dental, vision, and other health benefits) to ensure they don?t exceed the overall cap on employee benefits and trigger the excise tax.

The current version of the House bill eliminates Over-the-counter drugs as being eligible for reimbursement under an FSA, HRA, or HSA. This seems counter intuitive because it removes the incentive for participants to buy the cheaper over-the-counter drug and could lead towards people moving back to a more expensive prescription drug.

These are just the updates that we know as it relates to people's Flexible Spending Account. Obviously, there is much more going on that's being reported in the mainstream news, but we wanted to provide a targeted update for FSAs.

ProBenefits continues to encourage employers, participants, and other interested people to reach out to their members of Congress. A website has been created by an industry group which makes it very easy. Go to: www.savemyflexplan.org for more details.

Updates from the week:  July 27-31

The only notable event from the weekend was a continued shift and acknowledgement that we may not have a vote in the House prior to the recess. 

One Wednesday afternoon, the "Blue Dogs" and Chairman of the House Energy and Commerce Committee announced they had reached a compromise.  What this means is that the bill will head back to the Committee this week where they can continue their mark-up of the bill and hopefully pass it out of that committee.  The key provision in the compromise is that there will be no full floor vote in the House of Representatives until after the August recess. 

The Progressives on the Hill are reportedly not happy with the compromise and are threatening not to support the bill because too much was stripped out of it.   Mark-up of the bill was scheduled to start Wednesday afternoon, but was postponed until Thursday. 

Another key provision reportedly in the compromise is that the Blue Dogs will oppose all amendments offered by Republicans.  It will be interesting to see if that actually happens.

On the Senate side, 2 of the 3 Republicans working on a bipartisan bill have stated they didn't think an agreement could be reached prior to recess. 

An update as to regards to FSAs...

Gary Knight, ProBenefits President, is at an industry conference and the lobbyist that is working with our industry group, ECFC, stated that a cap on FSAs is definitely a real possibility.  The current House version of the bill has stripped out OTC drugs as well.  We are currently focusing on both of these provisions of the bill.

Updates from the week: July 20 - July 24

A general update of the week so far...

1. Senate Majority Leader, Harry Reid officially announced on Thursday what many have already suspected.   The full Senate will not vote on the bill prior to the August recess.
2. Members of the Senate Finance Committee continue trying to hash out a bi-partisan bill.  The group is down to 6 who are actively working on a compromise as Senator Hach from Utah backed out of the talks.  It's unclear whether or not they will be able to produce their version of the Bill by the August recess.
3. On the House side, the Energy and Commerce Committee has again postponed their mark-up of the House Bill.  It appears that their still seems to be negotiations taking place trying to lure the "Blue Dogs" support. 
4. The President continues his public effort to push Healthcare.
5. On Friday, Waxman, Chair of Energy and Commerce Committee says that he would allow the House to by-pass his committee and bring the full bill to the floor, if they cannot reach a compromise soon.
6. Update:  3:27 pm Friday - Blue Dogs walk away from the table angry.
7. Update:  6:00 pm Friday - Blue Dogs/Waxman negotiating again.

  Questions that remain this week.

1. Will Senate Finance get a bill out prior to the recess?
2. Will Energy and Commerce act prior to hearing from the Senate Finance Committee?
3. Will the Speaker of the House actually by-pass an important committee in order to make the August 'deadline'?
4. Will House have a full vote prior to the recess?

Stay tuned...

Last edited 7/23/2009 - 2:46 p.m.

New Report:  Senate Finance Committeee Bill (Baucus Bill) Will Effectively Eliminate FSAs.

A new report by the Republican staff of the Joint Economic Committee discusses why health care reform legislation approved by the Senate Finance Committee will effectively eliminate Flexible Spending Accounts (FSAs). The document can be found here: Link

Flexible Spending Accounts (FSAs) help individuals and families to payfor out-of-pocket medical expenses that are not covered by their health insurance plans with tax-free dollars.

FSAs are particularly important for individuals and families who have high medical expenses, such as seniors, and those with chronic health conditions or disabilities. The option of using tax-free dollars can reduce their out-of-pocket medical expenses by 20% to 40%. 

Legislation recently approvedby the Senate Finance Committee will not only limit allowable FSA contributions, but the fact that the limit is not indexed for inflation means that the inflation adjusted or "real" value of an FSA will decline steadily over time until virtually worthless.

Second, as employers and insurance companies seek to avoid paying the bill's proposed 40%excise tax on high cost plans, employers will be incentivized to reduce the allowable level of FSA contributions OR to eliminate the plans altogether.

Webinar - July 20, 2009

ProBenefits hosted a Health Care Reform webinar on Monday, July 20th. Presenters from ProBenefits were Gary Knight (President) and Jason Cogdill (Benefits Attorney). This session included an update on the health care reform process, including specifics about the recently-introduced Senate and House bills as well as a discussion of key issues and ways you can be heard as the process continues. ProBenefits has been very active in the health care reform process both on our own and through coordinated lobbying efforts in Washington. Our goal is to help inform you of current developments as well as arm you with information to participate in the process if you elect to do so.

Slides from the July 20th webinar are available here (PDF).