Health Care Reform-1/1/11 Flex change

[DebbieB]

They had to put something in to try to make the health care reforms look revenue neutral. This effectively increases taxes without calling it a tax increase since you will be able to shelter less income.

Doesn't affect me at all since I do not work for an employer who offers a plan. And since my husband is a retiree and our insurance is through his pension plan, we can't even pay our $900+ monthly premium with pre-tax dollars, which effectively increases our cost of insurance.

But I do feel bad for those who are used to being able to deduct who will now have to go to an extra step.

Can't you deduct it on your tax return?

 

[Christine]

CoQ10 and fish oil? I don't see why supplements and vitamins should be paid with pre-tax income. Those are not medications.

Many OTC vitamins are prescribed by doctors for health conditions.

Fish oil is BIG now for cardiac patients.

Iron is prescribed for anemia.

Sublingual B-12 is prescribed for pernicious anemia.

Most people with these health issues see a doctor regularly.

I see my doctor at least once per year to monitor anemia. He *always* writes out a script or a note for me to take iron and what dosage he prefers.

I've had my opthamologist write me out a note for fish oil and/or flax oil for dry eye.

Now vitamins and supplements have never been covered under the FSA unless you had a doctor's order for them. So, in that regard, the OTC meds are going to be the same. I don't see why any of us couldn't go into our docs during one of our visits and get a standard note for ibuprofen for a one year duration.

 

[Lisa loves Pooh]

Can't you deduct it on your tax return?

You can--but you need to have a high number of medical expenses before that can occur. The FSA's allowed people that don't have that high of medical expenses to take advantage of tax savings.


In the past we have had FSA's--but they haven't come close to what was needed if I were to do itemized medical expenses on a tax return.

 

[DebbieB]

You can--but you need to have a high number of medical expenses before that can occur. The FSA's allowed people that don't have that high of medical expenses to take advantage of tax savings.


In the past we have had FSA's--but they haven't come close to what was needed if I were to do itemized medical expenses on a tax return.

The person who posted said they could not have their insurance premiums deducted pre-tax, not an FSA. $900 a month would be over $10,000 annual so they should be able to itemize.

 

[Lisa loves Pooh]

I don't see why any of us couldn't go into our docs during one of our visits and get a standard note for ibuprofen for a one year duration.

Hmmmm....

the OTC meds we have used in the past year (and other HSA covered items):

UTI test
HPT test
Nyquil
Ibuprofen
Tylenol
Aleve
An Enema
Mucinex
Sudafed
Bandaids
Peroxide (though that is cheap!)
Neosporin
Butterfly "stitches"
Dramamine-tons and tons of it for DD
Benadryl

I'm just wondering--how is one to predict the laundry list of needs. Why not just let the items be covered without a prescription. They are OTC for a reason.

There are more--I just cannot remember every item in my medicine cabinet.

It is easy to ask why a doc can't write a blanket prescription--but when you take note of what occupies the medicine cabinet...that's an awful lot of blanket prescriptions.

 

[Lisa loves Pooh]

The person who posted said they could not have their insurance premiums deducted pre-tax, not an FSA. $900 a month would be over $10,000 annual so they should be able to itemize.

Missed that.

I'm guessing she cannot itemize a premium.

But someone that is an accountant would have to let us know.

ETA: just googled and IRS says they are deductible. Hmmmmm......

ETA: From wikipedia:

There are a number of allowable deductions:

Medical expenses, to the extent that the expenses exceed 7.5% of the taxpayer's AGI. (e.g., a taxpayer with an AGI of $20,000 and medical expenses of $5,000 would be eligible to deduct $3500 of their medical expenses ( 20,000 X .075 = 1500; 5000 - 1500 = 3500 ).) The 7.5% floor means that most taxpayers are unable to take advantage of the medical expense deduction. Allowable medical expenses include:

Not sure what that poster makes--but it may be part of their issue. Not sure--accounting math hurts my brain.

 

[bumbershoot]

CoQ10 and fish oil? I don't see why supplements and vitamins should be paid with pre-tax income. Those are not medications.

And right there is MY take (or rather, the opposite of my take) on issues with all of this. Our "medicines" are generally* homeopathic, herbal (nettle is AWESOME to prevent an asthma attack for me! as is black coffee), and otherwise natural in nature. DS got sick, his lips got chapped, and he couldn't stop licking them, causing damage to his skin. He saw a naturopath who prescribed him a cream made from all natural products.

As far as I know, none of those were or will be eligible for Flex Plan, even though we use those in lieu of the western medicines others would use for the same problems.

DH took supplements as part of a 3 pronged attack on a very very serious health problem around 15 years ago...every bit of his plan would be OOP (it was oop b/c he didn't have insurance, but even if he did, insurance wouldn't have covered anything but the MRIs he had done throughout), even though his plan absolutely worked, and he got rid of the very very serious health problem without a bit of western medicine.

So the flex plan has been useless for us ever since they stopped covering vitamins (about a year ago for our plan, perhaps 2 years)...our way of staying healthy was Emergen-C powder...we have only gone to any doctors when things are serious, while my other friends rush off for visits with the exact same colds we have...we are obviously much cheaper, but we pay out of pocket while they get their stuff covered.

It's an issue that isn't much talked about...but you saying that those things aren't "medicines" just brought it all up. Perhaps YOU don't take them as medicines, but many others do, and they work absolute miracles for many. And without the side effects that the covered, reimbursable, prescription and OTC western medicines have.

Thanks. This was the first year we had to choose some kind of account. I guess mine is an HRA plus the stuff I put in the FSA, which I know I will spend every penny of. I was getting confused with the HSA.

Do HSA's have any pre-tax benefits? I cannot find the sheet they gave us when choosing different options.

If you have an HRA that allows a Flex plan on top of it, you're in a unique situation (as are we). Normal HSAs do NOT allow Flex plans. So you have to be careful getting advice about it, b/c you don't seem to have a normal plan.






*DH has had two big things recently that have stepped away from our normal way of taking care of things... Just wanted to make that really obvious so no one thinks I'm lying here, since I do post about them...

 

[sparklynails23]

And right there is MY take (or rather, the opposite of my take) on issues with all of this. Our "medicines" are generally* homeopathic, herbal (nettle is AWESOME to prevent an asthma attack for me! as is black coffee), and otherwise natural in nature. DS got sick, his lips got chapped, and he couldn't stop licking them, causing damage to his skin. He saw a naturopath who prescribed him a cream made from all natural products..
So the flex plan has been useless for us ever since they stopped covering vitamins (about a year ago for our plan, perhaps 2 years)...our way of staying healthy was Emergen-C powder...we have only gone to any doctors when things are serious, while my other friends rush off for visits with the exact same colds we have...we are obviously much cheaper, but we pay out of pocket while they get their stuff covered.

It's an issue that isn't much talked about...but you saying that those things aren't "medicines" just brought it all up. Perhaps YOU don't take them as medicines, but many others do, and they work absolute miracles for many. And without the side effects that the covered, reimbursable, prescription and OTC western medicines have.



If you have an HRA that allows a Flex plan on top of it, you're in a unique situation (as are we). Normal HSAs do NOT allow Flex plans. So you have to be careful getting advice about it, b/c you don't seem to have a normal plan.


*DH has had two big things recently that have stepped away from our normal way of taking care of things... Just wanted to make that really obvious so no one thinks I'm lying here, since I do post about them...

Vitamin D? Drink milk and go out in the sun. Fish oil? Eat some salmon and tuna. You don't go to a doctor and get a prescription for a healthy diet, and you shouldn't get prescriptions for the lack of a healthy diet. Just because the doctor recommends that taking these vitamins and supplements will be beneficial to your health, that doesn't make them prescriptions. Prescriptions refer to FDA tested and approved drugs. Anything else should be paid for out of pocket with regular funds.

 

[chicagoshannon]

You're right ~ we don't. Other than the occasional purchase of ibuprofen or Tylenol for the kids, we rarely buy OTC meds.

And we also have a high deductible plan with a HSA.

Health savings account is being affected. You can now only put $2500 a year in it. So instead of our HSA being able to cover our entire deductible it will only cover 1/2 of it. SO much for the law not affecting those making under $250K a year! (tax wise)

 

[laurie31]

If you have an HRA that allows a Flex plan on top of it, you're in a unique situation (as are we). Normal HSAs do NOT allow Flex plans. So you have to be careful getting advice about it, b/c you don't seem to have a normal plan.

If you have an HSA, you can't use an FSA for medical expenses, but you CAN put your eye and dental expenses into one. Last year I used only the HSA, but we maxed it out, and didn't have enough money left by November for my DDs contacts. (I waited and ordered them in January with 2010 money). This year, I put health money into the HSA, and enough into the FSA for braces and contacts, since I *know* I'll use that. FSA is "use it or lose it," HSA can be used as a savings account and it rolls over.

 

[laurie31]

Health savings account is being affected. You can now only put $2500 a year in it. So instead of our HSA being able to cover our entire deductible it will only cover 1/2 of it. SO much for the law not affecting those making under $250K a year! (tax wise)

Only $2500??? Our OOP deductible is $4500!! That's for INSURED expenses, not OTC stuff!

 

[DebbieB]

I did find some info on this:

http://www.cnn.com/2010/HEALTH/03/23/health.reform.consumer.impact/index.html

http://www.jlbghealth.com/blog/arch...-laws-and-impact-on-HSAs,-FSAs,-and-HRAs.html

http://www.savemyflexplan.org/media_news/10-04-04_wsj.html

Other info on the changes:

http://www.cbsnews.com/8301-503544_162-20000848-503544.html?tag=contentMain;contentBody

 

[Mickeyluver37]

Health savings account is being affected. You can now only put $2500 a year in it. So instead of our HSA being able to cover our entire deductible it will only cover 1/2 of it. SO much for the law not affecting those making under $250K a year! (tax wise)

It will be interesting to see how DH's company handles this. Since they switched over to a high deductible plan (which sucks no matter what HR spin they try to put on it), the deductible has gone up every year. It's always supposedly because it goes up with the IRS law. So I wonder if they by law will keep raising the amount of the minimum deductible, if we can't even put as much in the account.

 

[PatsMom]

Missed that.

I'm guessing she cannot itemize a premium.

But someone that is an accountant would have to let us know.

ETA: just googled and IRS says they are deductible. Hmmmmm......

ETA: From wikipedia:

Not sure what that poster makes--but it may be part of their issue. Not sure--accounting math hurts my brain.

I can't deduct because of income. By the time we meet the 7.5% of AGI, what is left for a deduction is not enough to be larger than the standard deduction. We do not have a mortgage and our property taxes are quite low. And our insurance is fairly decent so we don't have a lot of other medical expenses. Although with this year's increase in our prescription drug co-pays we might get there. I figure the taxes both ways.

 

[golfgal]

Health savings account is being affected. You can now only put $2500 a year in it. So instead of our HSA being able to cover our entire deductible it will only cover 1/2 of it. SO much for the law not affecting those making under $250K a year! (tax wise)

That is not true. If you are SINGLE you can contribute $2900, families can contribute $5800. You are thinking about the flexible spending plan that is NOT the same thing as an HSA. HSA are beautiful plans-tax deduction for money put in, tax free growth, tax free use.

 

[laurie31]

That is not true. If you are SINGLE you can contribute $2900, families can contribute $5800. You are thinking about the flexible spending plan that is NOT the same thing as an HSA. HSA are beautiful plans-tax deduction for money put in, tax free growth, tax free use.

Oh thank you! What a relief! I couldn't figure out how my HSA was going to help us save for future medical expenses if we wouldn't even be allowed to out one years' worth in. With an OOP deductible of $4500, we will still have $1300 left over for other medical expenses, plus $2500 in the FSA for vision and dental. Phew!

 

[wdwfan16]

The person who posted said they could not have their insurance premiums deducted pre-tax, not an FSA. $900 a month would be over $10,000 annual so they should be able to itemize.

They have to exceed the floor. For 2009 and 2010 that floor is 7.5% of AGI. For 2011 it is 10%.

They can write off the mount above the floor. $900/month is $10,800. If their AGI is $144K then they cannot write off anything in 2009 or 2010. In 2011 the AGI would be $108K for no write off.

If they made 1/2 ($72K) in 2009 then they could write off $5400.

 

[Christine]

As far as the flexible spending account, I heard the $2500.00 limit was only going to be imposed on federal government employees (down from $5,000). Not on the whole population--i.e., private companies could elect their own limitations up to $10,000. Has that changed?