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ODC urges committee to increase the annual Flexible Spending Account cap

May 26, 2016

By Jennifer Garvin

In a time when out-of-pocket costs for health care “have never been higher,” the Organized Dentistry Coalition is urging the House Ways and Means Subcommittee to increase the annual flexible spending account cap from $2,550 a year to $5,000.

In a May 25 letter drafted by the American Association of Oral and Maxillofacial Surgeons and signed by 10 dental organizations, including the ADA, the ODC urged the committee to increase the limit so that consumers are able to put more of their pretax dollars toward health care expenses.

“We believe this restriction on consumer health care spending has been a major step back for consumers at a time when out-of-pocket costs for health care have never been higher,” stated the letter, addressed to Chairman Pat Tiberi, R-Ohio, and Ranking Member Jim McDermott, D-Wash.

“Out-of-pocket costs for traditional medical insurance easily exceed the current $2,550 annual cap,” the letter continued. “When you factor in the rising costs of deductibles, copays and prescription medication; this inflexibility forces some patients to forgo necessary care, including dental care.”

The coalition points out that in 2015 consumers spent an average of $4,065 for out-of-pocket expenses, according to the 2015 Milliman Medical Index, noting that dental procedures often require out-of-pocket expenses — even for those consumers with dental insurance.

“Many common and necessary dental procedures such as dental implants, a set of braces, a root canal, or even the extraction of an abscessed tooth require out-of-pocket spending,” they wrote. “By restricting consumers to save only 50 percent of what they can expect to spend out of pocket, we are forcing them to make critical medical decisions based on what they can afford, not on what is medically necessary.”

The ODC also asked the committee to consider legislation which would enable consumers to drive their own health care spending, citing H.R. 1185 as one such example.

In addition to increasing the annual FSA cap to $5,000 per year H.R. 1185 would:
  • Add an additional $500 to the FSA savings cap for each dependent above two dependents;
  • Better prepare for expected and unanticipated health care costs by carrying over unused funds and eliminating the IRS’s onerous “use it or lose it rule.
“This common sense legislation would be a huge step in the right direction and we would strongly encourage the committee to include this legislation as it considers tax-related proposals to improve health care,” concluded the letter.