I was reminded today of a provision in the new health care reform law that will take effect on January 1. If you have a medical reimbursement flex spending option at work your employer has likely informed you (or will soon) that the rules have changed.
Before I get into that… some of you may not be aware of what a flex spending account is. You can designate a certain amount a year to be withheld from your paycheck pretax for the purpose of medical reimbursement.
Then prior to payday you submit a report with receipts to seek reimbursements on things like copays, prescriptions, glasses, dentist visits, braces, over-the-counter meds, Band-Aids, doctors visits – you get the idea anything that has a legitimate medical or health purpose. You can do this throughout the year, and the thing to remember is if you don’t use it, you lose it. It does lower the amount of income taxes that you pay and it is helpful in paying down a deductible, etc. My family and I have done this every years since my employer first offered it.
Today I was reminded that the federal government will no longer allow you to turn in over-the-counter meds starting next year (with the exception of insulin). That may not sound like much, but for those who suffer from chronic pain, have arthritis, use expensive vitamins, or need allergy medicine it adds up. Some of those items can be reimbursed if you get a prescription from your doctor. So you then have to pay for an office visit (some doctors may not require that) in order to get a prescription you don’t need just so you can include it with the receipt you turn into your employer.
The thing to remember with all of this is that it is your money.
That seems minor to what is to come in 2013. Congress in its infinite wisdom capped what can be set aside in an FSA at $2500. My employer currently allows $3000, some companies allow $5000. There is no maximum limit to what an individual can do. This is problematic for a couple of reasons. The first is because some employers have a high limit so they can keep insurance costs lower by offering a higher deductible insurance plan. The second reasons is that people use this. I know my family does. That extra $500 can be applied to glasses or a dentist visit or what not. I know that I can save this money another way, but this has been incredibly helpful and it has lowered the amount of taxes that I pay.
Again it’s my money, it should be my choice, and it limits what employers can do for their employees. How is this reforming health care again? Gee thanks Congress and President Obama for making 2011 a little more expensive for me.
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