Are there changes to Health Spending Accounts (HSAs), Flexible Spending Accounts (FSAs) and Archer Medical Spending Accounts (MSAs)?
Yes, there are several: For FSAs under a cafeteria plan, annual contributions will be limited to $2500, beginning in 2013; the cap is indexed to the Consumer Price Index – Urban (CPI-U) for subsequent years. There is currently no federal limit and employers set the annual cap. The FSA definition of qualified medical expenses will be the same as those allowed under itemized tax deduction. Currently, employers can be more restrictive than the government for what qualifies as acceptable medical expense. This change, effective January 1, 2011, will no longer allow coverage of OTC items unless directed by a physician. The additional tax that applies to early distribution for nonqualified medical expenses before age 65 will go up: for HSAs, the tax will increase from 10% to 20% and for Archer MSAs, from 15% to 20%. The threshold of adjusted gross income for deducting medical expenses is raised from 7.5% of adjusted gross income (AGI) to 10%. Those 65 and over can continue to claim 7.5% of AG
Related Questions
- Can HSAs be combined with other employer-sponsored health plans like Flexible Spending Accounts (FSA), Health Reimbursement Arrangements (HRA) or Cafeteria Benefit Plans (Sec 125 plans)?
- Are there changes to Health Spending Accounts (HSAs), Flexible Spending Accounts (FSAs) and Archer Medical Spending Accounts (MSAs)?
- Which requirements that apply to health flexible spending arrangements (FSAs) under a cafeteria plan do not apply to HSAs?
