Health Reform Bill May Limit Tax-Free Flexible Spending AccountsNASDAQ/Dow Jones reports: "Employees who enjoy unlimited tax-free treatment of out-of-pocket?medical?expenses through employee-benefit plans could be facing new curbs on the tax?subsidy in health-care overhaul legislation. Senate?Finance?Committee?Chairman?Max?Baucus, D-Mont., is proposing to rein in so-called flexible-spending plans in legislation his panel is slated to take up next week. The new limits might make employers think twice about whether to even offer flexible-spending accounts as a perk, say employee benefits advisers. The tax-free accounts can be tapped to pay for expenses that aren't covered by an insurance plan - ranging from office co-pays, deductibles and medication, to orthodontia and fertility treatments."
"Baucus' proposal would cap annual contributions to the accounts at $2,000. Currently there is no statutory limit on the amounts employees can contribute, but some employers - including the federal government - cap their plans at $5, 000 annually" (Vaughan, 9/15). This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.