The ACA imposes a maximum dollar limit on employees' salary reduction contributions to a health FSA. Although the ACA set this limit at $2,500, the limit is indexed for cost-of-living adjustments each year. On Oct. 19, 2017, the IRS announced that, for taxable years beginning in 2018, the dollar limit on employees' salary reduction contributions to a health FSA will increase to $2,650.
On June 22, 2017, Republicans in the U.S. Senate released their proposal to repeal and replace the Affordable Care Act (ACA), called the Better Care Reconciliation Act (BCRA). The Senate bill closely mirrors the proposal passed in the House of Representatives—the American Health Care Act (AHCA)—with some differences.
On May 4, 2017, members of the U.S. House of Representatives voted 217-213 to pass the American Health Care Act (AHCA), after it had been amended several times. The AHCA is the proposed legislation to repeal and replace the Affordable Care Act (ACA).
On March 24, 2017, Republican leadership in the U.S. House of Representatives withdrew the American Health Care Act— their proposed legislation to repeal and replace the Affordable Care Act (ACA).
A House vote was scheduled to take place on that day, but House Republicans could not secure enough votes to approve the legislation and, instead, canceled the vote. As a result, the ACA will remain in place at this time.
In an effort to respond to the rising cost of health insurance, many employers make use of tax-favored accounts such as health reimbursement arrangements (HRAs), health flexible spending accounts (health FSAs), and health savings accounts (HSAs) to offer consumer-driven health plans.
These accounts have grown in popularity because they offer potential health care cost savings to both employers and employees. For example, individuals covered under under one of these benefits are more likely to seek preventive care, choose generic drugs, not misuse the emergency room and use online tools to research health care and providers.
Your Health Care Reimbursement Flexible Spending Account lets you pay for medical care expenses not covered by your insurance plan with pre-tax dollars. The expenses must be primarily to alleviate a physical or mental defect or illness, and be adequately substantiated by a medical practitioner. The products and services listed below are examples of medical expenses eligible for payment under your FSA, to the extent that such services are not covered by your medical and dental insurance plan.
A flexible spending account is an account in an employee’s name that can reimburse the employee for qualified health care or dependent care expenses. It allows an employee to fund qualified expenses with pretax dollars deducted from the employee’s paychecks. The employee can receive cash reimbursement up to the total value of the account for covered expenses incurred during the benefit plan year and any applicable grace period.