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February 8th, 2005
Today, U.S. Senators Jim DeMint (R-S.C.) and Ken Salazar (D-Co.)
introduced a bipartisan bill that allows millions of Americans
to better save and pay for their health care costs.
The Flexible Spending Account Enhancement Act of 2005 will make
it easier for more employees to take advantage of Flexible Spending
Accounts (FSAs) by allowing up to $500 of unused FSA funds to be
carried forward for use in the next year, or contributed to a Health
Savings Account (HSA). FSAs are tax-free employer-sponsored benefit
plans that reimburse employees for qualified health care expenses.
"FSAs are already very helpful tools, but we can make them
even better. These accounts allow people to save for unforeseen
medical expenses, yet they lose all of the unspent money they saved
at the end of the year. This “use-it-or- lose-it” rule
ends up penalizing workers and it just doesn't make sense," said
Senator DeMint, after delivering a speech about the legislation
to the National Association of Health Underwriters this morning. "Our
bill makes a commonsense change to FSA's that will help families
deal with rising health care costs."
"Giving employees the ability to rollover funds to the next
year will encourage more people to participate in FSAs because
they can better manage their hard-earned money," said Senator
Salazar. "We have to start allowing Americans to better save
for their own health care and give individuals more control over
their health care decisions."
Nearly 37 million private-sector employees have access to FSAs,
however, less than seven million take advantage of them today.
Approximately 76 percent of FSA participants will take advantage
of the rollover option each year, according to the Joint Committee
on Taxation.
“This legislation seeks to expand choices and create incentives
that will allow working people to take personal responsibility
for their medical needs in a manner that permits personal choice
and not government mandates,” said Janet Trautwein, Vice
President of Government Affairs at the National Association of
Health Underwriters.
Senator DeMint previously introduced this legislation in the U.S.
House of Representatives. The House approved it by a vote of 273-152
on May 12, 2004 but no action was taken by the Senate.
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