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News reports about congressional bills aimed at health care reform are generating a lot of speculation on how legislation may affect flexible spending accounts (FSAs), health reimbursement arrangements (HRAs), and premium-only cafeteria plans. At Allegiance, we’re closely following the congressional health care reform activity and will inform all of our employer clients if any significant changes are proposed to tax laws governing health and dependent care benefits. |
Currently, there are two bills that have been published. The House Bill is called America’s Affordable Health Choices Act of 2009. Allegiance has found no provisions in this bill that would eliminate the tax advantages of cafeteria plans, but there are provisions to tax those with an AGI (Adjusted Gross Income) of more than $280K on a graduating scale as the AGI increases. This bill has not yet been passed out of committee to the broader House. |
The Senate Finance Committee, chaired by Sen. Max Baucus, is still crafting alternate legislation that may impact FSAs and/or HRAs. Both the Affordable Health Choices Act and the legislation produced by the Finance Committee will be considered by the Senate in the days and weeks to come. |
Please contact Allegiance if you have questions. We will keep clients posted if there is news that affects the tax-favored status of any of the plans administered by Allegiance. |
Thank You! |
2806 S. Garfield, P.O. Box 4346, Missoula, MT 59806 / Tel. (877) 424-3570 |
Please do NOT respond to this message. Contact us at flex-inquire@askallegiance.com. |
The Senate Health, Education, Labor and Pensions Committee, chaired by Sen. Edward Kennedy, passed the Affordable Health Choices Act. The Act has been passed to the broader Senate floor, and does not appear to include language that would restrict HRA or FSA tax advantages.