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  1. #1
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    "The Obamacare Flex Account Tax"

    Are these assertions correct? And, can anyone explain the rationale behind these changes? As a parent of a special needs kid, I fail to understand how this particular provision helps America.

    ===========

    The Obamacare Flex Account Tax: The 30-35 million Americans who use a pre-tax Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs will face a new government cap of $2500. This will squeeze $13 billion of tax money from Americans over the ten years. (Currently, the accounts are unlimited under federal law, though employers are allowed to set a cap.)
    There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are several million families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. This Obamacare tax provision will limit the options available to these families.


    Read more: Americans for Tax Reform : $1 Trillion Obamacare Tax Hike Hitting on Jan. 1
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  2. #2
    KWL
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    This isn't new news. From a 2/2/11 Kaiser Health News report:

    The FSA restrictions are among many provisions of the health law targeted by Republicans for change or repeal, including some that are needed to finance an expansion of insurance coverage for millions of Americans who can't afford it. Congress' Joint Committee on Taxation estimated the FSA provisions in the law would generate more than $2 billion a year.

    Some health economists say FSAs are a wasteful tax break because they don't help those who need aid the most.

    "Is it really so bad to pay for insurance for our lowest income citizens by removing a tax break for our middle and upper income citizens that they use to buy aspirin and glasses?" asks Jonathan Gruber, a health economist at the Massachusetts Institute of Technology.


    This is affecting me (off-insurance treatments & medications for chronic Lyme Disease) but as with taxes, I'm willing to give up some for the greater good of society.
    Ken
    Ladonna Batiste-Williams: “I married a goddam musician, Ain’t no way to make that $#!↑ right.”

  3. #3
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    Quote Originally Posted by KWL View Post
    This isn't new news. ... I'm willing to give up some for the greater good of society.
    Uh yah thanks for your non relevant post.
    * not actually a Rock Star

  4. #4
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    I'd heard something about it before. Didn't pay it any attention because we don't use those accounts.

  5. #5
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    Quote Originally Posted by Creakyknees View Post
    And, can anyone explain the rationale behind these changes?
    The rationale as I understand it ( I'm no expert on this crap) is they are trying to raise revenue by closing a "loophole" that allows people to spend tax free money on frivolous items. Apparently the vast majority of people use around $1200, so many people end up trying to blow the left over money on unnecessary items so they don't lose the money they put in. Additionally, most companies had put a $5k cap on the FSA anyway. While it sucks (and perhaps there should be provisions for families of special needs), the roughly $1400 tax savings is a long way from paying a $14k tuition. A family in that situation would likely need to be looking at alternative methods to afford such care if the loss of $1400 is going to keep you from sending your child there.
    And I assume in theory, when Obamacare fully kicks in and everyone has insurance one wouldn't really need an FSA except to perhaps cover co-pays, $2500 is a lot of visits to the doctor


    And BTW, I too have a special needs child and his care has cost upwards of $100k/yr, and despite the fact that we make decent money, we would be totally screwed if not for government assistance and the health insurance we have. The change in the FSA policy has little effect on us.

  6. #6
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    Re: "The Obamacare Flex Account Tax"

    Quote Originally Posted by Creakyknees View Post
    Are these assertions correct? And, can anyone explain the rationale behind these changes? As a parent of a special needs kid, I fail to understand how this particular provision helps America.

    ===========

    The Obamacare Flex Account Tax: The 30-35 million Americans who use a pre-tax Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs will face a new government cap of $2500. This will squeeze $13 billion of tax money from Americans over the ten years. (Currently, the accounts are unlimited under federal law, though employers are allowed to set a cap.)
    There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are several million families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. This Obamacare tax provision will limit the options available to these families.


    Read more: Americans for Tax Reform : $1 Trillion Obamacare Tax Hike Hitting on Jan. 1
    FSA accounts allow people to make their own decisions on healthcare. That runs doubters to government takeover.

  7. #7
    but thinking about it
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    But don't the same expenses that could be paid out of an FSA qualify for itemized deduction if they reach 7.5% of AGI, such that if someone does have extraordinary medical expenses, they already have a route toward paying them with pre-tax dollars?

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