Minor Thoughts from me to you

Making your flex spending account a little less useful

"Let me be clear. If you like the health plan you have, you can keep it." President Obama has made this claim multiple times about healthcare reform. But it's simply not true. Let me offer one small example.

My wife and I enjoy our Flex Spending Account. We put in enough money each year to cover the various drugs we'll need to buy (both prescription and non-prescription), a new pair of glasses, and money to cover any other medical expenses we anticipate. Next year, I'm planning on putting in an extra $4000 for corrective laser eye surgery, so that I can finally stop wearing glasses. We like the plan we have.

Well, under the Senate healthcare bill, we'll no longer have that plan.

Both the House and Senate bills include a change in the definition of a “qualified medical expense” that impacts reimbursements and withdrawals under all types of health care accounts (i.e., FSAs, HRAs, HSAs, and Archer MSAs). As of 2011, expenses incurred for over-the-counter (OTC) medications and products will no longer be eligible for payment or reimbursement from any of the health care accounts. The House bill definition appears to apply to all OTC medications. However, the Senate bill would still allow OTC medicines obtained with a prescription and insulin to be reimbursed or paid tax-free from the health care accounts.

The most significant change likely to be enacted is an annual limit on contributions made by employees to flexible spending arrangements (FSAs) for health care. Both the House and Senate versions of health reform legislation would limit contributions to no more than $2,500 annually. The limit would be indexed to inflation for future years. Under the House bill, these changes would not take effect until 2013. In the Senate bill, these changes would take effect in 2011.

If the current "reform" bills, I wouldn't be able to buy OTC drugs -- Sudafed, Mucinex, ibuprofen, Tylenol -- tax free. If the "reform" bills pass, I wouldn't be able to save tax free for corrective eye surgery. I would no longer have the plan I like.

It's just one more broken promise from a president that's building quite a pile of them. Apparently, "yes we can" act just like any other politician.