Legislation Would Repeal Arbitrary Caps on FSAs and Repeal Mandate Requiring Prescriptions to Purchase Over-the-Counter Medication Using HSAs and FSAs
Texas Insider Report: WASHINGTON D.C. U.S. Senator Kay Bailey Hutchison (R-Texas) has introduced The Patients Freedom to Choose Act as an amendment to the Economic Development Act (S.#782) currently being considered by the Senate. The Hutchison Amendment would repeal two provisions in the 2010 health care law that limit a patients choice in how to use consumer-directed health savings plans.
The 2010 health care legislation prohibits individuals from using funds from either Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs) to purchase over-the-counter medication without a prescription from their doctors. In addition starting in 2013 the newly enacted law institutes a federal cap for all FSAs of $2500. Over 80 percent of all large employers that offer an FSA to their employees include a limit that is over this $2500 threshold.
Sen. Hutchisons amendment repeals the arbitrary cap on FSAs by striking the $2500 restriction. It also repeals the provision that requires patients using HSAs or FSAs to have a prescription from their doctors before they purchase over-the-counter medication.
Allowing individuals the flexibility and freedom to use health benefit accounts without contribution caps or the additional expense of an office visit to their physician has helped make these accounts very popular" Sen. Hutchison said. A new study from Americas Health Insurance Plans indicates that these Health Savings Accounts are more popular than ever with 11.4 million Americans enrolled up from 10 million a year ago. We must ensure that these plans flexibility and benefits are not hindered by the disastrous regulations in the Presidents health care law.
HSAs and FSAs are innovative and popular health benefits that both large and small employers offer to their employees. These accounts allow individuals to set aside a certain amount of money each year on a pre-tax basis in order to pay for various healthcare expenses. More than 35 million people have FSAs and 85 percent of all large employers -- those with over 500 employees -- offer them as a benefit to their employees.
Before the health care law was enacted there was no federal cap that employers had to comply with in order to offer an FSA to their employees. Consequently the median limit on FSA benefits offered by employers is $4500. Federal employees can contribute up to $5000 to their FSAs. State employees in 46 states including Texas have FSA contribution limits set at $3000 or more.
