The Affordable Care Act & my FSA (timeline through 2013)

Basics
is an important day for health care reform: it’s the beginning of open enrollment for the Health Insurance Marketplace. The Health Insurance Marketplace promises to offer easier and more affordable insurance options for Americans. According to the Department of Health and Human Services, it will allow consumers to shop for insurance by comparing health plans that fit their needs. On HealthCare.gov you’ll be able to search for insurance options – whether personalized coverage (for you or your family) or small business coverage

What about my Flexible Spending Account (FSA)?

If you have an FSA, you might be concerned about how health care reform could affect your plan. Below is a small timeline of coverage changes that have occured so far to keep you in the loop.

Health Reform & FSA Timeline

2011:

Since January 1, 2011, over-the-counter medications have required a prescription to be eligible for reimbursement under a Flexible Spending Account, Health Savings Account or Health Reimbursement Account. Insulin is an exception to this prescription rule.

January 1, 2013:

  • FSA contributions are limited to $2,500 per plan year. However, if you and your spouse have an FSA that means you could potentially contribute up to $5,000 per household! The contribution limit will be adjusted for inflation starting in 2014.
  • According to a Mercer National Survey of Employer-Sponsored Health Plans, the average employee contribution to an FSA was $1,424 in 2009 – which shows that the contribution cap should not affect many participants. It’s still advisable to budget your FSA throughout the year and use an FSA towards eligible services and products as necessary (eligibility of products and services is outlined in your individual plan document).

Important to Know

  • If your FSA plan has a grace period, any unused funds remaining for the grace period do not count towards the $2,500 limit for the new plan year.
  • The $2,500 contribution cap is only applicable to the Health Care FSA. Dependent Care FSAs, Health Savings Accounts and Health Reimbursement Accounts are not affected (although most have their own applicable limits).

Additional information

Employers can find details about compliance with the new limit via IRS Bulletin 2012-40.

The U.S. Department of Health and Human Services shows how health reform affects your state (in terms of insurance options) here.

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