FSAs Under Fire

One of the changes under the proposed health care reforms is to reduce the amount of money that workers can contribute to a flexible spending account (FSA). Currently, with an FSA, an employee can deposit a certain amount of money each year--the amount depends on whether the coverage is individual or family--out of pre-tax dollars and use that money throughout the year to pay for out-of-pocket medical expenses, such as deductibles, co-pays, OTC medications, and other costs not covered by health insurance.

It's been proposed to lower the amount of money that workers can contribute to their FSAs. What's the big deal? Well, if FSA contributions are capped at a lower rate, then people will will not be able to set aside as many pre-tax dollars for medical expenses, which means their taxable income will be higher. Right now, FSAs help American workers save up to 25% on payroll taxes on every medical expense, but the proposed caps will reduce that tax savings.

Save My Flex Plan provides a great deal of information about how this change will affect the hundreds of thousands of workers who contribute to FSAs. I encourage you to read more about this issue and write to your Congressional representatives to ask them to oppose these FSA caps.

Welcome to the BBG Blog

Welcome to my blog. I'm James Barham, a long-time resident of Champaign County, Illinois, and owner of Barham Benefit Group (which I'll often refer to as "BBG" because it's quicker). Barham Benefit Group (based in Champaign, IL) is an independent employee benefits consulting firm that has been helping local businesses and organizations since 1997. In 2006, Champaign native John Katsinas came on board at BBG as an associate.

Barham Benefit Group's company website (www.barhambenefit.com) has more information about the services we offer, and I hope you'll visit the site if you want more information.

My goal with this blog is to provide timely news and announcements, mainly about employee benefit planning and related issues, but also about issues of interest to residents of Champaign-Urbana and surrounding communities. Ours is a vibrant community, and I take pride in the many activities, community groups, and events available to us all. I want to share that with you.

So, check back often. I'm hoping to publish updates at least once a week. The Upcoming Events list in the sidebar at the right will be updated regularly. If you have an event you'd like me to list, please send me an email.

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