Side Effects: The Beginning of the End for FSAs

Richard Sherwood / April 29, 2010

“If you like your current health coverage, you can keep it.”  It was a key promise of Obamacare.

But the new law gives government a say in everything from the benefits you carry to the treatment you receive.  And that means very real changes to existing coverage.  One of those many changes derive from new restrictions on flexible spending accounts (FSAs).

FSAs allow users to put aside pre-tax dollars for out-of-pocket health expenditures such as co-pays, deductibles, eyeglasses, and dental work.  Typically, it cuts out-of-pocket costs by around 20 percent.  FSAs are especially valuable for consumers with chronic illness and others who have large foreseeable medical costs (families: think orthodontics!). And because FSA funds cannot be rolled over year to year, the accounts encourage responsible budgeting and use of health services. (more…)