Learned something new about the new HCR law regarding flex spending and some questions

[aikoaiko]

Flexible Spending Accounts will be limited to $2500 beginning in 2013.

http://online.wsj.com/article/SB127032871499171957.html?mod=WSJ_PersonalFinance_PF4

By KRISTEN GERENCHER

Will it take a new ceiling on flexible spending accounts to encourage people who have them to reap their benefits more completely?

In 2013, the new health-reform law will limit the amount you can sock away in a flexible spending account (FSA) for health expenses to $2,500 a year, with annual increases reflecting cost-of-living adjustments. Today, on average, only a third of people offered FSAs contribute to them at all, according to Mercer, a New York-based consulting firm.

This is sad thing for me. I have wife and son who are dealing with chronic health issues and I max out this contribution (now $6500) every year because its tax free money. Being tax free it really means I get about an additional $1000 to spend on health care related costs. I've usually spent that money by the end of May.

I think I understand why this change will occur. Paying taxes on the $4000 not put on the FSA will help pay for medical for others. I'm not thrilled about it, but what is done is done.

My employer also offers the chance to use Health Reimbursement Accounts which appears to be functionally the same as FSA. I know there are a few differences like the HRA rolling over.

My questions are:
Will there be a new much lower cap on HRAs under the new Health Care Reform? I ask because I've not seen anything mentioned yet.
If not, why are FSAs targeted but not HRAs? Being that they are almost functionally identical especially regarding taxes I don't understand the differential treatment.

edited to call the Health Reimbursement Accounts its proper name.

[DesertFlower]

1. ours is called a Health Care Reimbursement Account.

we're allowed to put up to $5100 a year to cover co-pays and other medical/dental expenses not covered by our health insurance.

i will not be happy if we can't do this.

[aikoaiko]

2. You are correct the alternative to Flex Spending Accounts is Health Reimbursment Accounts

Let me change my OP. I know they are different than FSAs because I always had the choice, but I don't know if they are affected by the new law.

[DesertFlower]

3. i'm concerned because we decided that

starting next year we're going to drop our dental coverage. it's $79 a month. they only pay up to $2,000 a year and there's also a $50 deductible for each of us. the last few months they started to give me a hard time about my claims. It's Met life. my periodontist's office manager said she has had to get the arizona insurance commissioner involved several times to get their claims paid.

i told my dentist that when my husband comes in for his next cleaning to look and see if any crowns need replacing. if they do we'll do it this year while we're still covered.

[aikoaiko]

4. I feel your pain, I have Metlife too for dental.

Is your organization like mine in that if you go off of dental, you can't go back on?

Let's hope HRA's are not capped at a lower limit.

Someone who knows this new law will chime in eventually.

[DesertFlower]

5. i don't know about going back on.

we've always taken the dental. they only allow for 2 cleanings a year. hubby gets 4. i get 3. they allow crowns to be replaced after 5 years. i had my done and then they denied it. said "we don't think you needed it". my dentist's office manager then sent them x-rays which showed that i had gum recession. they took their time, but finally paid. of course, they only pay about 1/2 of what the dentist charges. i had a cleaning last month. the charge was $111. after they took the $50 deductible off they paid the dentist $39.65. i have to pay $71.35. and of course, the max they pay is $2,000 a year.

there is no way i would let them get away with not paying for the crowns. if they can do that, what's stopping them from saying "we don't think you needed that 2nd cleaning."

sorry i went on a rant.

[aikoaiko]

6. self-kick because someone probably know the answers to my questions

[aikoaiko]

7. BTT

;)

[aikoaiko]

8. self-kick because someone probably know the answers to my questions

again

[aikoaiko]

9. One more kick hoping for answers.

I suppose my HR department will notify me one way or the other.