Compliance March 11, 2011

Congressmen Introduce Bill to Drop ‘Use it or Lose it” FSA Provision

March 11, 2011 (PLANSPONSOR.com) – Two lawmakers have introduced a bill that would repeal the “use it or lose it” aspect of medical flexible spending accounts  (FSA).
Reported by

A news release from the office of U.S. Representative Charles W. Boustany (R- Louisiana) said the bill he and John Larson (D-Connecticut) put forward would allow participants to cash out any remaining FSA balances at the end of the year, and those funds would be treated as normal, taxable wages. Currently, unused FSA funds are forfeited back to the employer at the end of the year.

“Americans want health-care solutions that lower costs,” Boustany said, in the news release. “FSAs are a great place to start. These accounts should not penalize individuals who save for medical expenses. We should eliminate this provision and empower consumers to make prudent health care decisions.”

Added Larson in the announcement: “It is truly unfair that families must forfeit hard-earned dollars that they have reserved for health expenses if they remain in the account at the end of the year. I am proud to join my colleague, Dr. Boustany, in this bipartisan effort to eliminate this provision that has been in effect for far too long.”  Boustany is a retired heart surgeon.

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