From the August 2009 issue of Ceridian Connection.

As lawmakers have sifted through the tax code for new revenue sources to help pay for universal coverage subsidies, they appear to have targeted FSAs. In the House of Representatives, proposals have been on the table not only to prohibit the use of FSA funds for over-the-counter medicines such as Tylenol and Claritin, but even to repeal FSAs completely.

Meanwhile, the Senate Finance Committee is considering imposing a statutory cap of perhaps $2,000 on the amount of salary that employees can contribute annually to their FSAs.

Ceridian has joined with the Employers Council on Flexible Compensation (ECFC) and other FSA administrators in an ad hoc coalition to oppose these changes as an unfair tax increase on working families -- particularly as out-of-pocket health costs continue to skyrocket.

Ceridian has contacted leading U.S. senators to urge them to oppose legislation that would repeal or substantially curtail pretax saving in FSAs. In many ways, the FSA issue is a microcosm of the broader challenge facing President Obama on healthcare reform: he has pledged not to increase taxes on the middle class -- but apparently cannot achieve universal coverage without new taxes.

Four consensus issues	SPACE	Four roadblocks to reform
Insurance market reform	SPACE	Financing healthcare reform
Creation of a health insurance exchange	SPACE	Saving for out-of-pocket health costs: FSAs in the spotlight
Subsidies for lower income households	SPACE	Public plan option in the health insurance exchange
Support for wellness and prevention	SPACE	Employer mandate