WASHINGTON – This month, Representatives Steve Stivers (R-OH) and Vicente Gonzalez (D-TX) and Senators Roy Blunt (R-MO) and Kyrsten Sinema (D-AZ) reintroduced the Responsible Additions and Increases to Sustain Employee (RAISE) Health Benefits Act, or the RAISE Act. This bipartisan, bicameral legislation seeks to give hardworking Americans more discretion in how they pay for the health care their family needs, while also allowing them to save for future expenses.
Rising health care costs are a major concern for families across the country, and many turn to Flexible Spending Accounts (FSAs) to help cover out-of-pocket costs such as doctor copayments, prescription drugs, medical supplies, or vision and dental services, which total up to $5,547 per year for the average worker. The RAISE Act will nearly double the amount of money a family can contribute annually, and allow unused funds to roll over each year, as opposed to being forfeited under current law.
“This bill is simply about putting the ‘flexibility’ back in ‘flexible spending accounts.’ Health care costs are a burden for too many families, and it is important that they have the ability to choose what is best for their families. This is the type of commonsense legislation that both sides of the aisle can support because FSAs are extremely popular, and we have the chance to make them better,” Representative Stivers said.
“Your family, your needs, your healthcare – your decision. Americans deserve the right to have appropriate tax advantages to plan their spending when it comes to the health and well-being of their family. Enabling Americans to save for healthcare is a non-partisan issue. I am proud to join Congressman Stivers in this effort to give families the power of flexible financial options on a case-by-case basis,” Representative Gonzalez said.
“Health care costs are one of the biggest financial challenges families face and flexible spending accounts are an important tool to help them save, especially for unexpected expenses. I’m encouraged by the bipartisan support for expanding FSAs, and hope this is an area where we can work together to make it easier for families to manage their health care costs,” said Senator Blunt.
“High health care costs leave too many Arizona families struggling to make ends meet. Increasing the amount of money Arizonans can save in tax-free flexible spending accounts helps those dollars go further and allows families to plan for the future,” said Senator Sinema.
Under the Affordable Care Act, an annual cap was established for contributions to FSAs, a cap which now rests at $2,700 – far lower than the nearly $5,600 a family spends for their health care coverage. This arbitrary cap does not reflect the reality of health care costs that families face today and undermines the economic benefits of allowing families to use FSAs to build up funds for medical needs. The RAISE Act addresses this by increasing that cap to $5,000, while also allowing an extra $500 per each dependent above two dependents, allowing larger families to save more towards medical costs.
In addition, current law includes a “use it-or-lose it” rule: any unused funds in an FSA at the end of the year are forfeited as opposed to being rolled over to the next year, again, impeding a family’s ability to save for a child’s braces or to prepare for an unexpected procedure. The RAISE Act eliminates this rule and allows any unused funds to be rolled over in perpetuity.
This legislation has been endorsed by the American Association of Orthodontists.
“The American Association of Orthodontists applauds Representatives Steve Stivers and Vicente Gonzalez for reintroducing the RAISE Act on a bipartisan basis. Flexible spending accounts (FSAs) are a critical tool for individuals of all incomes, and are used by approximately 63% of AAO members’ patients for their orthodontic services. Current limitations on FSAs -- including an arbitrary $2,700 contribution cap that is well below most families’ out-of-pocket healthcare spending, and limitations on rolling over funds -- prevent families from maximizing these accounts,” AAO President Dr. Brent Larson said.
“The AAO supports the RAISE Act, which would raise the contribution cap to $5,000, and allow families with more than two dependents to contribute an additional $500 per additional dependent. The RAISE Act would also eliminate the “use it or lose it rule,” allowing families to save for planned or long-term medical needs. The over 9,000 U.S. members of the AAO are encouraged that elements of the RAISE Act passed the House last summer, and we strongly encourage the 116th Congress to finish the job and give consumers greater control of their family’s healthcare spending,” Dr. Larson continued.
###
