Baucus Health Care Bill Threatens Chronically Ill and Millions With Flexible Spending Accounts

WASHINGTON, Sept. 17 - Following today's introduction of a health care reform plan by Senate Finance Committee Chairman Max Baucus (D-MT), Joe Jackson, chairman of Save Flexible Spending Plans and CEO of WageWorks, a benefits company based in San Mateo, California, issued the following statement:

"It's disappointing and unreasonable for health care reform to be financed by restricting access to FSAs, a valuable benefit used by millions of Americans to manage and hold down their health care costs."

"Imposing a $2,000 cap on contributions to FSAs, as proposed by Chairman Baucus, would reduce the value of the benefit and force plan participants to pay more in taxes and health care costs at a time when many can least afford it - an outcome inconsistent with the goals of health care reform."

"Those who stand to lose the most with a $2,000 cap on FSA contributions are those that have the greatest health care costs - individuals and families battling chronic conditions that average $4,398 per year in out-of-pocket costs, according to the Robert Wood Johnson Foundation."

"Without a cap higher than $2,000 on FSA contributions, Congress could force plan participants, including many fighting chronic illnesses, to forgo necessary medical treatment, prescriptions and supplies for financial reasons, resulting in a deterioration of health and an increase in hospitalizations and overall health care system costs."

"A major flaw of the proposed cap is that it isn't crafted to adjust over time to inflation, which is unreasonable and provides an even larger tax increase on the middle class."

"Lastly, Chairman Baucus has proposed to limit the use of FSAs for over-the-counter medications unless you get a doctor's prescription. Although this provision does not make good health policy sense since many over-the-counters are used to manage chronic health conditions, it at least allows FSAs to be used for some over-the-counters, unlike the House provision that would eliminate them from FSA reimbursement entirely."

About Flexible Spending Accounts

Flexible spending accounts (FSAs) are voluntary, account-based plans that enable millions of Americans to use pre-tax dollars to pay for eligible out-of-pocket health care expenses like prescription drug co-pays, vision and dental costs, office visits and medical supplies. Most FSA participants are middle income, earning approximately $55,000 annually. Currently, limits on contributions to FSAs are set by individual employers.

In July, the House Ways and Means Committee approved health care reform legislation that includes a ban on using money set aside in FSAs to buy over-the-counter medications such as aspirin and allergy medications.

About Save Flexible Spending Plans

Save Flexible Spending Plans is a national grassroots advocacy organization dedicated to preventing the elimination of flexible spending accounts in health care reform efforts. The campaign is sponsored by the Employers Council on Flexible Compensation (ECFC), www.ecfc.org, a non-profit organization dedicated to the maintenance and expansion of private employee benefit programs on a tax-advantaged basis.