Thursday, December 30, 2010

Health care flexible spending accounts need work

Flexible Spending Accounts (FSA) are great. They allow you to spend pre-tax dollars on medical expenses.
And, as co-pays get higher and more of your bills come back rejected by your insurance carrier, the debit card FSA is handy.
But why do they have to make it so complicated?
I have talked to people about FSAs and many of them do not participate in this employer-provided benefit.
The main reasons given are that it is too complicated.
And it is. To participate you must calculate what your out-of-pocket medical expenses will be for the coming year. And you must be accurate, because anything that is not spent on medical expenses during the year is not refundable.
That last part is the worst. At this time of the year people are desperately trying to spend down the last of their FSA so that they will not lose it.
Why does the FSA have this rule?
Wouldn't it be much more convenient and user-friendly to require that FSA accounts be spent down to the last $100, and anything between $100 and 1 cent would roll over into the next year?
Who do I need to talk to about making this change?


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