Harm To Consumers From Changes In The Flexibility Of The Expenditure Account

Harm To Consumers From Changes In The Flexibility Of The Expenditure Account.
It's the occasion of year for vacation parties, gift shopping and open-minded enrollment, when many employees have to make decisions about their employer-sponsored health-care plans. Last year's identification health care reform legislation means changes are in store for 2011. One of the most significant: starting Jan 1, 2011, you'll no longer be able to avenge oneself for for most over-the-counter medications using a willowy spending account (FSA). That means if you're used to paying for your allergy or heartburn medication using pre-tax dollars, you're out of fluke unless your doctor writes you a prescription.

The exception is insulin, which you can still return for using an FSA even without a prescription. Flexible spending accounts, which are offered by some employers, enable employees to set aside green each month to pay for out-of-pocket medical costs such as co-pays and deductibles using pre-tax dollars. "This is basically reverting back to the direction FSAs were used a few years ago," said Paul Fronstin, a older research associate at the Employee Benefit Research Institute in Washington, DC "It wasn't that fancy ago that you couldn't use FSAs for over-the-counter medicine".

Popular uses for FSAs embody eyeglasses, dental and orthodontic work, as well as co-pays for prescription drugs, doctor visits and other procedures, explained Richard Jensen, conduct research scientist in the department of health method at George Washington University in Washington, DC Over-the-counter drugs became FSA "qualified medical expenses" in 2003, according to the Internal Revenue Service. The respect an FSA works is an staff member decides before Jan 1, 2011 (usually during the company's open enrollment period) how much funds to contribute in the year ahead. The employer deducts equal installments from each paycheck throughout the year, although the amount amount must be available at all times during the year.

Typically, FSAs operate under the "use it or lose it" rule. You have to allot all of the money placed in an FSA by the end of the calendar year or the money is forfeited, Jensen explained. Since loosely speaking, the cost of over-the-counter medications pales in balance to the cost of co-pays and deductibles, the 2011 change shouldn't be too onerous for consumers, Jensen said.