Big Benefits Could Come From Small Changes to Flexible Spending Accounts
Eliminating the artificially low limits on the Health Care Flexible Spending Account (FSA) would provide significant benefits to families with special-needs children, diabetics, and employees who – or whose families – need vision, hearing, dental or orthodontic care, or any other health care not normally covered by health insurance. It would also lessen the pain of higher health insurance deductibles and other patient cost-sharing, which could even reduce insurance premiums, and therefore federal premium subsidies. The result would be substantial help with health care expenses to families who need it most, with a minimal impact to the federal budget.
In addition, eliminating the FSA “use it or lose it” rules would provide benefits to those same families and many more, while at the same time eliminating wasteful health care spending and possibly reducing health insurance premiums.