Powerful Republican lawmakers want to help protect employees from losing benefit account contributions.[@@]
The members are supporting industry and insurer groups that are asking the U.S. Treasury Department to change the health flexible spending account use-it-or-lose-it rule.
The groups have sent a letter asking the Treasury Department and the Internal Revenue Service to create a rule that would permit a small amount of FSA assets to be carried forward in an FSA account each year. The money could be spent only on qualified health expenses.
The letter says the change would encourage more employees to use health FSAs.
"We believe this action would help employers and their employees respond to rapidly rising health care costs, particularly as it becomes necessary for employees to assume greater responsibility for their health care expenses," use-it-or-lose-it opponents write in the letter.
The use-it-or-lose-it rule requires that all funds in FSAs be spent in the year in which they are contributed. Otherwise, the participant loses the balance in the account at the end of the year.
