Health Care Changes That Will
Impact Your FSA Contribution
Many important provisions of the health care reform bill that passed last March are already beginning to be implemented. When planning how much to contribute to a health care flexible spending account (FSA), consider some of these key changes.
- Adult children up to age 26 can now rejoin their parents’ health care insurance and qualify as dependents for FSAs so long as they are not offered insurance through their own employer. Therefore, be sure to consider costs for any new family members that you are adding back to your insurance! Some employers are also allowing mid-year increases to FSA contributions.
- Beginning in September 2010, some preventive care will begin to be offered for free. Screening tests for blood pressure, diabetes and cholesterol will no longer require a co-payment. Various cancer screenings (like mammograms and colonoscopies), vaccinations, pre-natal care and routine care for infants and children will also be included in this group. If you were planning to pay for some or all of these screenings out-of-pocket using your FSA in the next year, you may no longer need to budget for them.
- As of January 1, 2011, over-the-counter (OTC) medications except insulin require a doctor’s prescription in order to be reimbursed through an FSA. A guidance issued by the IRS also indicated that items that are not medicines or drugs – like crutches, bandages and test kits – are still eligible for FSA reimbursement. Be sure to request necessary prescriptions from your doctors in advance and determine any new costs so that you can budget appropriately. Health Reimbursement Arrangements (HRAs) and Health Savings Accounts (HSAs) will also follow this same ruling.
- Some health insurers have indicated that they will need to raise premium costs in order to account for the new services they will offer – like coverage for adult children and free preventive care. A recent survey by the Kaiser Family Foundation and Health Research and Educational Trust found that premiums for employer-sponsored health care coverage rose by an average of three percent for families and five percent for individuals. Be sure to check with your health insurer to find out if any of your cost-sharing amounts will change.
- Plan ahead for expensive or elective health procedures because beginning in 2013, there will be a $2,500 cap on annual FSA contributions. If you have a procedure that you have been delaying, like LASIK eye surgery or braces for a child or yourself, this is a great year to set aside money for it in your FSA so that you can get the best deal.