Senate Finance Committee could limit or eliminate flex savings accounts
The Senate Finance Committee has released a list of possible health reform options, including reducing contribution limits to flexible spending accounts or eliminating them entirely.
Congress is also considering eliminating or making major changes to health savings accounts.
Little Rock, Ark.-based DataPath, Inc., a software solutions provider for the employer-benefit industry, will take part in a lobbying effort on Capitol Hill to save FSAs. The Employers Council on Flexible Compensation, of which the company is a member, has created a sample letter template for employers to use.
“Employers and employees who are champions of consumer-driven healthcare need to reach out to their legislators,” said John Robbins Sr., president and chief executive officer of DataPath. “We agree that steps must be taken to make healthcare more affordable and accessible, but eliminating programs such as the FSA that allow consumers to better control their healthcare expenses isn’t the answer.”
According to the ECFC, the elimination of FSAs and HSAs would undo the progress made in achieving higher levels of consumer engagement in healthcare choices and decisions. Without these accounts, they said, individuals won’t be able to monitor their own healthcare expenditures and may have to opt into more expensive healthcare coverage.
The Senate Finance Committee is also considering limiting the amount that can be contributed to an HSA, requiring substantiation of HSA expenses and increasing penalties for early withdrawal from 10 percent to 20 percent.
“Imposing additional substantiation on HSAs would greatly increase the administration and transaction costs on these accounts. That, in turn, will increase the cost to deliver healthcare for the millions of Americans who maintain HSAs,” Robbins said.
DataPath, along with other ECFC members, will be on Capitol Hill June 8-10 to lobby Congress on behalf of employers and other consumer-driven healthcare advocates.