www.employersgroup.com/newsandlegislation/flex-accounts -
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Published on: 1/10/2006
Last Visited: 8/20/2009
"We obviously would like to have FSAs come out of this debate untouched, unscathed," said David Carver, the executive director of the Employers Council on Flexible Compensation.
"Our whole point is to be participatory and make sure we communicate what we think."
Carver said although the House proposal applies to multiple types of tax-advantaged health care savings plans, within his membership FSAs are the most prominent benefit.
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In response to the discussions in both chambers, Carver told BNA Aug. 3 that ECFC recently began a newspaper advertisement campaign in the Washington, D.C., area to educate Congress and the public on the benefits of FSAs, noting in the ads that they "pay for essential out-of-pocket health expenses" such as doctor visits, hospital admissions, drugs, dental work, and eyeglasses.
Proponents like ECFC say the plans help people meet the costs of their health care needs with pre-tax dollars.
Opponents, like some congressional Democrats, say they are tax shelters for the wealthy.
Hoping to take the campaign to other parts of the country, Carver said the reception to the ads and face-to-face meetings has been "fantastic."Lawmakers, he said, "want to know what they're voting on."
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Carver agreed, calling the price differential between prescription drugs and over-the-counter drugs "unbelievably large."He said some lawmakers "don't seem to be looking at it from how the consumer's behavior may be impacted by something like this."
He said the change represents an "absolutely wrong direction to take health care policy," and noted that it would violate President Obama's pledge not to raise taxes on incomes below $250,000.
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Carver disagreed, pointing out that the average annual income of an FSA participant is $55,000.
He said two "myths" about FSAs really bother him.
The first is that they are for the rich.
FSAs, he said, "are subject to discrimination testing, meaning the highly compensated cannot abuse them because they cannot get access to them unless the people that would be in the nonhighly compensated category are participating, effectively eliminating their ability to abuse them."
The second "myth," he said, is that they are regressive.
"The tax code is regressive," Carver said.
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Carver said traffic to the sight has been in the tens of thousands but he expects it to increase after his group's recent annual flexible benefits administrators' symposium.
ECFC also employs Mehlman Vogel Castagnetti Inc., a lobbying firm, which Carver said assists with "fly-ins," where members from around the country visit the Capitol to meet with lawmakers and staff to discuss tax-advantaged accounts.
Working on Possible Compromises
Carver said ECFC has a number of proposals that it could live with in the event that Congress chooses to modify FSA rules.
For example, rather than forcing taxpayers to use their money or lose it, allowing them to receive their money back, up to a certain amount, and taxing it would result in the government's raising revenue.
"Our statistics show people are not putting in enough money,"Carver said.
"Most balances are all the way down after the first quarter."
Giving the money back to the taxpayers would make people more efficient consumers of the health care system, he said.
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"We understand what they're trying to undertake here, what the president's trying to do," Carver said.
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