February 27, 2019
WASHINGTON – This month, U.S. Senators Roy Blunt (Mo.) and Kyrsten Sinema (Ariz.),
and U.S. Representatives Steve Stivers (Ohio) and Vicente Gonzalez (Texas) 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.
“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,” said Sen. Blunt. “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.”
“High health care costs leave too many Arizona families struggling to make ends meet,” said Sen. Sinema. “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.”
“This bill is simply about putting the ‘flexibility’ back in ‘flexible spending accounts,’” said Rep. Stivers. “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.”
“Your family, your needs, your healthcare – your decision,” said Rep. Gonzalez. “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.”
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 toward 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.