Bipartisan Legislation to Help Families Afford Medical Expenses (Rep. Dave Camp)

With health care expenses on the rise, many families are struggling to pay out-of-pocket costs, like deductibles and copayments. Flexible spending accounts are meant to make it easier for families to put aside tax-free money for such expenses. But many Americans avoid using these accounts because any unused contributions must be forfeited back to your employer at the end of the year.

I have introduced bipartisan legislation with Rep. John B. Larson, D-CT, that will restore fairness and equity to medical flexible spending accounts (FSAs).

This legislation will help families save money because it will allow participants to cash out any remaining funds and pay normal taxes on the balance.

With health care costs soaring, we need to do everything possible to encourage individuals to spend their health care dollars wisely. However, current law is a catch-22, in which people are forced to either needlessly and wastefully spend money out of their FSA or lose their hard-earned money come December 31. This bill makes sensible reforms so that individuals have an opportunity to cash out up to $1,500 from their accounts.

A recent survey found that 20 percent of Americans are foregoing doctor’s visits and medical treatments because of the high costs. One of the most useful tools to help families afford these increased costs is a health care spending account. Only 15 percent of families are currently enrolled in an FSA.  By fixing the “use-it-or-lose-it” rule that has kept many Americans from contributing, we will expand involvement and provide a significant benefit to those who already participate.