The “My Money, My Health” campaign is dedicated to protecting employee contributions to Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) from the effects of the Excise Tax (commonly referred to as the “Cadillac Tax.”)
- The original intent of the excise tax was to decrease health care costs and finance the expansion of health coverage by taxing benefit-rich plans with no deductibles or out-of-pocket expenses.
- However, the tax impacts individual’s ability to save for their health care needs. Employee contributions to FSAs and HSAs are employees’ own money and should not be taxed as “Cadillac plans.” Employee contributions to FSA and HSAs should not count toward the threshold for determining whether a health care plan is subject to the Cadillac Tax.
- FSA and HSA users are middle class families. On average, they earn roughly $57,000 per year, which is less than 300% of the federal poverty level (FPL). Approximately 103.5 million Americans benefit from consumer-directed accounts.
- Options such as HSAs and FSAs will go away as a result of the tax calculation. According to an American Health Policy Institute survey using data of large employers collected in June and September of 2015, the excise tax is already having, and will continue to have a significant impact on these accounts and plan offerings.
- Including individual’s contributions into their HSAs and FSAs as part of the excise tax calculation will harm the very people the ACA was trying to help.
- Overall, the excise tax will decrease coverage options for families.
Although the tax should be repealed, in order to provide immediate relief for those relying on HSAs and FSAs to make their health care affordable, Congress should exempt individuals' contributions to HSAs and FSAs from the tax’s calculation.
Take Action Now
Click here to take action now by sending a message to your elected officials in support of FSA and HSA plans. Click here for more background on the Excise Tax, and for additional studies and data showing the potential impact of the tax on consumer-directed plans.