FSAs are a tool along with health savings accounts (HSAs) and health reimbursement accounts (HRAs) that can help to engage consumers to be value-seekers in healthcare.
As Goodman writes on his blog
There is no reason workers should be forced to spend their Flexible Spending Account (FSA) funds in December on unnecessary purchases like prescription sunglasses rather than forfeit the money. With a tax free rollover, 35 million people would be added to the 27 million or so who already have a “use-it-or-save-it account” (Health Savings Accounts and Health Reimbursement Arrangements). So this could have a huge impact on health care markets.
Two unresolved problems: Would people be able to withdraw unused funds, pay taxes and spend the money non-health consumption? They should. Another restriction that needs to go is the rule that an unused balance in an employer FSA account precludes obtaining a Health Savings Account (HSA) because HSAs cannot coexist with other types of coverage that provide for first-dollar benefits.
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