I have long suggested to therapists who are cash or out of network based that they promote the idea of medical spending accounts to their patients (a win win situation for both the provider and the patient). Now comes word that workers taking advantage of special tax-free accounts to pay out-of-pocket medical expenses could soon be allowed to carry over up to $500 from one year to the next. Previously, employees eligible to use the accounts had to forfeit any unspent money at the end of the year, but a new rule now permit employers to let plan participants roll over up to $500.
The accounts, known as flexible spending accounts, allow employees to contribute up to $2,500 a year from their pay, before taxes are deducted. The accounts can then be used to pay certain medical expenses not covered by insurance, including co-pays. Employees generally decide how much to set aside in the accounts before the start of the year. Because it can be difficult to estimate medical expenses a year in advance, some people are discouraged from taking advantage of the accounts. Yet for many of our patients, particularly those with long term challenges ( ie pediatrics, chronic diseases like RA, MS etc.) a therapist should be able to estimate the frequency and duration of treatment required.
This is a great step to give our patients more help to pay for out-of-pocket health care costs.
Employers sponsoring the plans, however, are not required to offer the option. Some plans give workers up to two and a half months at the start of the year to spend the money in the accounts. The new rule says plans can offer either a grace period or the $500 rollover, but not both. Some plan sponsors may be eligible to start letting workers carry over the money at the end of this year, Treasury said in its announcement. Others may have to wait until next year to start offering the feature.
Info like this can go a long way on your website to keep your patients informed. For additional info: https://www.npr.org/blogs/thetwo-way/2013/11/01/242394351/irs-change-allows-rollover-for-flexible-spending-accounts