Talking Points: Paulsen’s FSA Roll Over Bill

MINNEAPOLIS (WCCO0 — Millions of Americans have flexible spending accounts that allow them to use pre-tax dollars for out-of-pocket medical expenses.

A flexible spending account (FSA) gets taken directly out of one’s paycheck. There is a $5,000 limit per year, and people can use it for items including uncovered medical and dental expenses, orthodontics and eye glasses. But if they have any money left over at the end of the year, they lose it.

Minnesota Congressman Erik Paulsen has introduced a bill to allow people to roll over the money if they don’t spend it.

“You should be able to carry it over to the next year,” he said. “This is the direction we should be going in to really save health care dollars. There is bi-partisan support for this.”

Paulsen is optimistic about his bill, but he says any law that changes health care takes time.

“I am going to keep aggressively moving forward,” he said. “It’s the way to go.”

More from Esme Murphy
  • WAY TO GO ERIK !!!!


  • vesta44

    It’s never been right that if you don’t use all the money in your FSA, you lose it. After all, that money is yours, you earned it, and you set it aside for medical bills. Just because you didn’t have enough medical bills to use it all doesn’t mean you shouldn’t get to keep whatever money is left over. It would be a different story if that money was coming out of your employer’s pocket or out of the government’s pocket, but it isn’t, it’s coming out of your pocket.
    I mean really, if you set aside money for an emergency, and didn’t have one that year, would you burn that money and then set money aside the next year for emergencies? What kind of sense does that make? And who gets the unused money in those FSA accounts? Where does it go, if not back to the person from whose paycheck it came? Talk about a license to steal.

    • frankie

      Your employer did not explain things very well to you. It is untaxed money. To give it to you would add more cost to the employer as the accountants would have to take out tax. It was not set up to be an emergency fund. The excess can be used by the company to ofset the cost of administering it. After those costs are covered the company may donate it to charity. It can also be used to ofset the cost of the company health plan.

      • Sam I am

        Your correct, but the roll over can help build more so less is taken out the next year increasing your taxable income.

        If you carry over 500 into the next year that is 500 less that needs to be taken out and 500 more that is taxable income.

  • The Truth

    I’ve never used Flex Spending primarily due to this rule. He is right, there is bipartisan support for this. I’m a lifelong Democrat, and I support it.

  • mark

    great story and great idea Paul, now make it happen

    • frankie

      Who is Paul?

  • Brett

    Gee, I didn’t know that this was such a BURNING ISSUE among voters. What I mostly hear about is how seniors are starving, others are losing their homes to foreclosure, some are driving their older cars longer, etc. How many have enough disposable income to put away $5K as a tax break, then complain when they lose it if they don’t use it? Mr. Paulsen, how about focusing on our nation’s crushing debt, illegal immigration, crumbling highways and bridges (not BIKE PATHS), and violent career criminals?

    • old nurse

      It is not disposable income if you are paying needed medical costs. Any landmark bills are not going to have Erik Paaulson’s name attached to them. This way he can say he sponsored something. Perhas the tea party is stiffling his ability to fix the crushing debt.. If he fixed the illegal immigration how would his sponsors have any housekeepers. Lastly, get off your butt and use the bike paths

  • what?!?

    Best idea I have heard out of a REP’s mouth in about a decade – I vote democrat but Erik you get my vote on this one – Email your reps and make sure they get on board with this one….

  • Par for the course

    It was just a matter of time until this issue came to the front. The government puts so many road blocks in front of the average person. The use it or lose it mentality fits right in. Think about it they tax you to infinity but you can only put aside $17,000 per year into 401k and then are not able to also have a traditional IRA. Why not a 401k and a traditional IRA? 17k per year is peanuts compared to what you will need in 20 or 30 years. All upside for the government and all downside for the average person looking to make a living and save for retirement and not be taxed to death.

  • Mechanic

    I lost mine during the NWA lockout years ago, I was on medical leave at the time, and needed that money to pay my medical expenses. It was money that I earned and was handed back to NWA.

    • asdf

      So who was responsible for the lockout?

  • Z Wilf

    I think all the unused money should go to the Vikings’ stadium.

    • Jenny

      That is because you are a sleazy pig.

  • STP

    Should we be getting ready to pay higher premiums for flex benefits if this all goes through as planned?

    I had flex benefits for quite some time and I never even had to use it because my health care covered enough as it is so I got rid of it. I would consider signing back up if I felt a sudden need for it but definitely not if they were to raise premiums due to some new rollover rule that raises the value of the benefit program all together.

    I feel this is a waste of time.

    • NAS

      The account is set up so that whatever amount gets taken out of your paycheck goes into the flex spending account so if it doesn’t get rolled over, you lose YOUR money.

      I agree though, it’s a stupid program as anyone could set up an emergency savings account for themselves without having to have somebody do it for them and I feel that this is a waste of time.

      • old nurse

        I am certainly glad that you have a health plan that you have no out of pocket expenses for. Great that you and your family (if you have one) is healthy. For many in the rest of the real world there are medical expenses. There are not enough expenses to get a tax deduction for most. With planning this is a way to save a little tax money. Again, kudos for being healthy, thumbs down for the narcissism.

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