The tax-savings vehicle, which allows an employee to deduct a specific amount each paycheck, helps to defray medical costs and thus is particularly helpful for those coping with a serious diagnosis like arthritis. According to benefits administrator Ceridian Corp., health flexible spending accounts, or FSAs, can save users an average of 30 percent annually. Even so, employees are understandably cautious about how much they deduct from their paycheck; any unused money is forfeited at year’s end.
But for those who can afford to deduct money, the savings can be vital, says Marty Rosen, executive vice president and co-founder of Health Advocate Inc., an employer-provided service that assists employees in navigating insurance and other health-related issues. “Especially for someone with a chronic illness, it’s almost a no-brainer,” Rosen says regarding the accounts. “It would be almost like burning money if you didn’t do it.”
In 2011, those living with arthritis will have to stay on top of several new changes, implemented as part of the health reform law, the Patient Protection and Affordable Care Act.
Under the first change, effective January 1, 2011, a doctor’s prescription will be required to obtain reimbursement through the accounts for over-the-counter medications, or OTC medications, such as ibuprofen and proton pump inhibitors. Those who heavily rely on FSAs also may want to consider some pre-planning steps, if they typically set aside several thousand or more in the accounts. Starting in 2013, no more than $2,500 can be reserved annually.
Assessing impact
Users of health FSAs tend to be married with children and fall within a middle-income bracket, with a median income of $50,000 to $70,000, according to data from SHPS, a benefits administrator.
Typically, one-fourth of FSA dollars are spent on medications, either prescription or over-the-counter, according to SHPS data. Only 20 percent of FSA users might be impacted by the impending $2,500 cap, but they are more likely to have significant health issues.
However, one challenges is that many arthritis patients are on some type of biologic medication and OTC use may be minimal. Another difficulty is that regular use of medications, such as naproxen, can lead to the use of other OTC medications, such as antacids or proton pump inhibitors for stomach issues.
At this point, Davis says her son doesn’t take any OTC medication.
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