Barton Introduces Bill to Give Military Reservists Needed Financial Flexibility

WASHINGTON- U.S. Rep. Joe Barton R-Ennis introduced legislation today that will give those who serve in the United States military reserves the opportunity to receive the money they have set aside for health care expenses instead of having it disappear when they are called to active duty.

Many employers give their employees the option of contributing pre-tax dollars to Health Care Flexible Spending Accounts (HCFSAs).  The money held in these accounts can be used to cover the cost of medical expenses.  While HCFSAs give employees a useful tool to pay for health care they are limited by what is known as a “use it or lose it” provision.  Under current law any money that has been contributed to an HCFSA but not used by the end of a twelve to fourteen month period is removed from the account and returned to the employer.

The bill introduced today by Congressman Barton would change current law to make it possible for military reservists who have been called to active duty to be exempted from the “use it or lose it” provision.  The bill has received bi-partisan support with Rick Boucher (D-VA) serving as the lead Democratic sponsor.

“The men and women of the military reserves are heroes who risk their lives to serve our nation yet they are in a unique position because they also have civilian jobs that must be put on hold when they are called to active duty” Barton said.  “Those who elect to contribute their hard-earned dollars to HCFSAs should not be penalized by the ‘use it or lose it’ provision given that their service makes it is impossible for them to ‘use’ the funds.“

The legislation would give employers the option of distributing back to the employee any unused HCFSA contributions once that employee has been called to active duty.  These distributions would count as regular income when reported to the IRS and would give some financial flexibility to families of reservists.

“My bill would correct the law and give reservists who have been called to active duty the opportunity to receive the money they contributed to their HCFSA instead of seeing it go to waste” Barton said.  “The men and women of our military reserves should be commended for their service not prevented by the law from accessing the money they have rightfully earned.”