NAFCU writes Congressional leaders in support of Flexible Savings Accounts

WASHINGTON-In a letters to three separate lawmakers last week, NAFCU extolled the virtues of H.R. 1590, the Flexible Savings Accounts (FSA) Rollover bill. NAFCU points out that the bill not only helps consumers but also employers and financial institutions. Many employees set money aside in FSAs for medical emergencies, but, under current law, if they don’t use the funds in these accounts they lose the money. “The current `use it or lose it’ policy of FSAs is punitive to those who have illnesses who could use annual building up of FSA funds for serious medical episodes, and this policy discourages healthy individuals from availing themselves of FSAs since they lose the set-aside money if they don’t incur medical expenses,” NAFCU wrote in identical letters to Nancy Johnson (R-Conn.), chairman of the Subcommittee on Health in the Ways and Means Committee, and Congressman William Thomas (R-Calif.), who is chairman of the Ways and Means Committee. In a separate letter to Congressman Jim Ramstad (R-Minn.), the author of the bill, NAFCU wrote that the accounts actually might lead people to waste that money. “Perversely, some have alleged that people buy prescription sunglasses at the end of each tax year to use their FSA money, instead of allowing it to revert to their company,” according to NAFCU. The legislation would permit employees to rollover $500 annually in unused FSA funds. Employers should also see a decrease in the cost of healthcare and credit unions and other financial institutions could service the accounts, according to NAFCU