Health Flexible Spending Accounts (FSAs) encourage consumerism by promoting greater individual control over and responsibility for employees' health care spending decisions. By allowing employees to save on a pre-tax basis for out-of-pocket health expenses, these accounts provide an opportunity to save money for health care expenses while also developing an appreciation for the cost of services and the importance of planning ahead.
As with any tax-advantaged vehicle, health FSAs are subject to strict IRS rules governing their design and administration. Employers must currently comply with a host of complicated and sometimes restrictive regulations on reimbursable medical expenses, the use of debit cards to pay for eligible medical expenses, coordination with other types of health care accounts (HRAs and HSAs) and carrying over unused amounts to future years (the "use-it-or-lose it" rule). Additionally, the ACA capped people’s contributions to FSAs to $2,500 annually (2018 inflation adjustment to $2,650) and required people to have prescriptions to use FSAs to purchase OTC drugs
IRS Increases Health FSA Contribution Limit for 2019
The IRS released Revenue Procedure 2018-57, which increases for inflation the voluntary employee health FSA contribution limit to $2,700
National Business Group on Health's Position Statement on Health Accounts
The National Business Group on Health supports regulatory and legislative efforts to promote consumer-directed health care and health accounts.
Policy Brief — Policies to Enhance Affordable Health Coverage: Consumer-Directed Health Plans
This public policy brief examines the impact of this type of coverage on costs, quality and other important factors. It also recommends policy changes suggested by the research to make these types of plans easier to use for needed health care services.