Paulsen Applauds Treasury Department For Changing FSA “Use It or Lose It” Rule

Allowing Individuals to Roll Over $500 in FSA Savings is also a Key Provision in Paulsen Legislation

Washington, D.C. – Today, Congressman Erik Paulsen (MN-03) issued the following statement after the Treasury Department and Internal Revenue Service’s (IRS) decision to change the so called “use it or lose it” rule for Flexible Spending Accounts (FSAs). The new ruling will allow individuals who take advantage of FSAs to have $500 roll over to the following year. Paulsen introduced legislation in May to allow $500 in FSA savings to roll over to the next year.

“Flexible Spending Accounts give nearly half a million Minnesotans the option of utilizing their own healthcare dollars for out-of-pocket medical costs,” said Rep. Paulsen. “With health care costs on the rise, Congress should be taking steps to make it easier for Americans to save, not limit their options. I’m pleased with the Treasury’s decision, and more must be done to help Minnesotans retain control of their own healthcare needs.”  

Under the President’s new healthcare law, FSA contributions were reduced from $5,000 to $2,500. The law also created new limitations on HSAs and FSAs that prevent consumers from using those savings to purchase over-the-counter treatments like aspirin and cold medicine without a doctor’s prescription.

Paulsen’s bill, H.R. 2194, the Family and Retirement Health Investment Act, will simplify HSAs and FSAs for American families, seniors, and veterans. The legislation will enable families to access consumer directed health plans to make better health care decisions and decrease the cost of health care. Read the legislation HERE.

Paulsen, a champion of small business and advocate of free enterprise, entrepreneurship, and innovation, serves on the House Ways and Means Committee, the bicameral Joint Economic Committee, and is co-chair of the Congressional Medical Technology Caucus.

For more information on Rep. Paulsen’s work in Congress and to view previous editions of Erik’s Correspondence Corner visit www.paulsen.house.gov.

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