Finance & Enjoyment Blog

Changes to Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs), and Medical Savings Accounts (MSAs)!

One of the biggest changes that occurred with the passing of the Health Care Reform Act of 2010 was with Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs), and Medical Savings Accounts (MSAs). Starting in 2011, all over the counter medicines are prohibited from being reimbursed by these accounts. This change will be felt on many different levels as over the counter medicine is the most common purchase by these accounts. For those that plan well, this change will be felt by a higher net payroll amount, but this will be countered by higher payroll taxes which will also raise the employer’s share of payroll taxes. This exclusion could also affect retailers if people choose to forgo buying new optional medicine since there is no longer a tax benefit. One other change will be a cap going into effect in 2013. This cap will limit the amount of FSA contributions from $5,000 to $2,500.

For questions or additional information, contact an expert at KKB, 303-815-1100.


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