Fast-forward to early this year, when President Obama announced that health care reform would become a top domestic priority. I thought to myself, "Finally, we will help the uninsured." The problem, however - as is often the case - is funding. With deficits doubled and tripled, the money has to come from some area. Little did I know that wiping out the industry I've worked in for over 20 years would be an option to fund health care reform.
Back in the early 1980s, I left my employer and put all the money I had into opening a business that offers pretax benefit plans like flexible spending accounts. Today, my company is growing and employs more than 80 full-time workers.
Yet, among the proposals for funding health care reform is eliminating FSAs. Although this industry has proven its staying power and benefit for over 25 years, and employs roughly 1 million people, the government has put it on the chopping block. These well-meaning federal representatives are ignorant of the effect that closing this tax break could have on the 48 million employees who use FSAs - not to mention hundreds of thousands of employees who work in this industry providing services.
FSAs are such a great benefit because for every dollar an employee elects to use for unreimbursed medical expenses, it saves on FICA, FUTA, state and local taxes. The average family in Wisconsin participating in an FSA would save 30% on medical expenses. Put simply, a $1,000 emergency crown feels as though it is only $700. Thanks to an FSA, that unexpected expense becomes a little easier for most families to deal with.
FSAs not only benefit employees; employers also receive a tax savings for offering the benefit, which in turn helps to lower the cost of health care plans. Taking away FSAs will shift higher costs to employees - high deductibles, coinsurance, copays - to pay rising medical costs. FSAs are the only way employees can manage to take on higher shares in health care costs. Eliminating them creates an even greater hardship on an already overtaxed population.
In this business, I have weathered the various storms of legislation. But this time, with full democratic control of Congress, I believe the loss of this terrific benefit and industry literally is around the corner. It doesn't have to happen. Join me in preserving this much-needed industry; contact your local representatives to voice your opinions today.
Ric Joyner, MBA, CEBS, GBA, CFCI
CEO
eflexgroup.com
Madison, Wis.
