BPC Breaking News

New HSA limits for 2013 Announced

Thu, 3 May 2012 03:59:37 CST

The Internal Revenue Service (IRS) recently issued the 2013 limits for health savings account (HSA) contributions, deductibles, and out-of-pocket limits.

• The annual HSA contribution limit for individuals with self-only coverage is $3,250, and $6,450 for individuals with family coverage. (2012 limit is $3,100 and $6,250)

• Qualified "high deductible health plans" must have an annual deductible that is not less than $1,250 for self-only coverage or $2,500 for family coverage, (2012 limit is $1,200 and $2,400) and annual out-of-pocket expenses may not exceed $6,250 for self-only coverage or $12,500 for family coverage.(2012 limit is $6050 and $12,100)

IRS Announces Retirement Plan Limitations for 2012

Thu, 19 Jan 2012 11:12:35 CST

The Internal Revenue Service recently announced the annual Cost-of-Living Adjustments (COLA) for retirement plans and related limitations for the 2012 tax year.

Mileage Rates Released

Thu, 15 Dec 2011 08:34:44 CST

The IRS issued the 2012 standard mileage rate used to calculate the deductible costs of operating an automobile for medical purposes. Beginning on January 1, 2012, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be 23 cents per mile driven for medical purposes. The new medical rate has been reduced by 0.5 cents per mile from the 2011 rate.

New Limits for Transportation and Adoption

Wed, 26 Oct 2011 02:50:21 CST

The IRS has released the 2012 cost-of-living adjustments (COLAs) for limits relating to qualified transportation fringe benefits and adoption assistance.

Qualified Transportation Fringe Benefits. For 2012, the monthly limit on the amount that may be excluded from an employee’s income for qualified parking benefits will be $240, which is a $10 increase from the 2011 limit. But the temporary increase in the combined limit for transit passes and vanpooling expenses that was in effect for 2011 (which made the combined limit the same as the parking limit) has expired. Unless Congress acts to reinstate the increase, the combined monthly limit for transit passes and vanpooling expenses will be $125 in 2012.

Adoption Assistance Exclusion and Adoption Credit. First EGTRRA and then health care reform enhanced the maximum adoption tax credit and income exclusion for employer-provided adoption assistance. Despite temporary extensions under the 2010 Tax Relief Act the tax credit will again be nonrefundable in 2012 and the limits will be reduced. The maximum amount that may be excluded from an employee’s gross income under an employer-provided adoption assistance program (under Code § 137) for the adoption of a child will be $12,650 for 2012 (a $710 reduction from the enhanced 2011 limit). In addition, the maximum adoption credit allowed to an individual (back again under Code § 23, after having been temporarily redesignated as Code § 36C) for the adoption of a child will be $12,650 for 2012 (also a $710 reduction from 2011). Both the exclusion and the credit will begin to be phased out for individuals with modified adjusted gross incomes greater than $189,710 and will be entirely phased out for individuals with modified adjusted gross incomes of $229,710 or more (both income levels are $4,500 higher than for 2011).

Account Management Interface Maintenance Planned

Mon, 24 Oct 2011 04:41:01 CST

We will be taking the account management interface offline from Monday October 24 from 7:00 p.m. and 12:00 a.m. central time.

Additional maintenance will be taking place Thursday, October 27th between 7:00 a.m. and 12:00 a.m. central time.

While balance information will be unavailable, you will still be able to access online claims and documentation upload systems during the outages.

We apologize for any inconvenience in accessing your account information online. If you have questions please do not hesitate to contact us at (800) 355-2350.

Mileage Rate for Transportation to Obtain Medical Care Will Increase in July

Fri, 1 Jul 2011 05:58:16 CST

The IRS has announced a midyear increase in the standard mileage rate for use of an automobile to obtain medical care (which may be deductible under Code § 213 if it is primarily for, and essential to, medical care). For travel on or after July 1, 2011, the new rate will be 23.5 cents per mile (a 4.5 cent increase from the 19 cents per mile rate that applied during the first six months of 2011).

IRS Announces That Breast Pumps Will Qualify as Medical Care Expenses

Fri, 4 Mar 2011 11:10:56 CST

The IRS has ruled the cost of breast pumps and supplies that assist lactation will be tax-deductible and qualify as medical care expenses under Code Section 213(d) because they are for the purpose of affecting a structure or function of the lactating woman's body. The ruling means that women will be able to use money set aside in pretax spending accounts (health FSA or HRA, or for a tax-free distribution from an HSA) to buy the pumps and related equipment. For women without flexible spending accounts, the cost of pumps will only be tax deductible if their total medical costs exceed 7.5 percent of adjusted gross income.

In the past, plans treated breast pumps as dual-purpose expenses that could only be reimbursed if the participant provided a note from a medical practitioner recommending the breast pump to treat a specific medical condition (e.g. a breast abscess). The new guidance allows these items to be reimbursed, regardless of the existence of a medical condition.

FSA participants may submit claims for breast pumps and supplies for reimbursement from their FSA for the current plan year or during the run-out period for the prior plan year if they have a remaining balance.

IRS Announcement 2011-14 (Feb. 10, 2011) is available at http://www.irs.gov/pub/irs-drop/a-11-14.pdf

Additional Upgrades to www.bpcinc.com Improve Website Speed

Wed, 2 Mar 2011 02:43:52 CST

In order to improve the reliability and speed of our websites, BPC will be installing additional system upgrades this coming weekend starting at 5:00 PM CST on Friday, March 4th. While there may be intermittent downtime to our websites, we expect everything to be completed and your access speed to be improved before business resumes Monday morning. If you have any questions or need additional information, please contact BPC at (217) 355-2300 or (800) 355-2350 or visit us at bpcinc.com

Congratulations to Ann Campbell of Indiana University Health North Hospital!

Tue, 15 Feb 2011 01:52:55 CST

Ann's name was randomly selected as the winner of the iPad giveaway sweepstakes from BPC.

Agencies Delay Applicability and Enforcement Of Fully Insured Nondiscrimination Requirement

Tue, 18 Jan 2011 03:19:51 CST

The IRS has delayed the application and enforcement of the additional nondiscrimination requirements for non-grandfathered FULLY INSURED plans that are required under the Affordable Care Act. This notice only impacts fully insured plans. Self-insured plans continue to be subject to the Code's nondiscrimination requirements and penalties.

IRS Notice 2011-1, available at www.irs.gov/pub/irs-drop/n-11-01.pdf states that ". . . compliance with §2716 should not be required (and thus, any sanctions for failure to comply do not apply) until after regulations or other administrative guidance of general applicability has been issued under §2716." This means:

No excise tax under the Code §4980D ($100 per day per person discriminated against);
No Form 8928 self-reporting of excise tax due to nondiscrimination failure;
No civil penalties; and
No civil action to enjoin noncompliant conduct or seek other equitable relief.

According to Notice 2011-1, compliance with the new nondiscrimination requirements will be prospective after regulations or other guidance is issued.

The agencies received many comments and questions regarding application and implementation of these new rules. The agencies are now requesting additional comments on the problems associated with implementing the statutory mandate. The comment period is open until March 11, 2011. We are grateful the agencies are showing genuine concern for employers difficulties implementing these changes so quickly with no guidance. If you have any questions, please contact BPC at 217-355-2300 or 800-355-2350.

Sign Up for Direct Deposit and Win an iPad!

Tue, 18 Jan 2011 03:16:51 CST

With direct deposit, you can get reimbursed faster . . . BPC flex reimbursements will be deposited directly in your checking or savings account saving you time and getting your money back to you safely and quickly. Direct deposit with BPC is convenient, fast, reliable, and safe. For complete details and to sign up today go to: www.bpcinc.com/directdeposit or use the attached form above.

IRS Announces 2011 Dollar Limitations

Tue, 18 Jan 2011 03:13:43 CST

The Internal Revenue Service has announced Pension Plan Limitations for retirement plans for the tax year 2011. The Social Security Administration also announced the Taxable Wage Base for 2011. These amounts, which are in general the same as 2009 and 2010, are outlined in the above attachment.

Updated IRS Guidance: OTC Changes Effective January 1, 2011

Tue, 18 Jan 2011 03:13:01 CST

On Friday, September 3, 2010, the IRS issued Notice 2010-59 and Revenue Ruling 2010-23 which provided initial guidance with respect to the new rule included in the Affordable Care Act that requires a doctor's prescription for the reimbursement of over-the-counter (OTC) drugs and medicines from Health FSA accounts and other tax-advantaged health care accounts.

In summary, the guidance confirms the following:

Participants will still be able to use their tax advantaged health care accounts for purchases of ALL OTC drugs and medicines, as long as they have a doctor's prescription.
The rule applies to all tax-advantaged health care accounts, including Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs), Health Reimbursement Arrangements (HRAs) and Archer Medical Savings Accounts (Archer MSAs).
The rule takes effect January 1, 2011 and applies to purchases on or after January 1, 2011, regardless of plan year. This includes 2010 plan year grace period expenses for OTC drugs/medicines purchased on or after January 1, 2011. The only acceptable form of documentation for reimbursement for OTC drugs and medicines is a doctor's prescription, as regulated by state law.
Insulin, medical devices (crutches, blood sugar monitors, etc.) and items such as bandages, contact lens solution, denture bond, etc. remain eligible and will not require a prescription. See attached list for additional examples.

BPC Flex Benefit Cards will be affected when using it for OTC medicine/drug purchases on or after January 1, 2011. Most retailers will update their Inventory Information Approval Systems (IIAS) with the new eligible products list as soon as possible on or after January 1 to reflect movement of OTC drugs or medicines from the "Eligible" to "Dual Purpose" category. The new guidance allows for a 15-day enforcement delay until January 16, 2011 for card transactions. This is to allow merchants time to implement the new eligible product list. Eligible items will continue to be approved at the point-of-sale. Dual Purpose items, however, such as aspirin and cough medicine, will require a doctor's prescription. Dual Purpose items will no longer be eligible for BPC Flex Benefit Card purchase at the point of sale so you will need another form of payment. You can submit a claim with a detailed receipt and a doctor's prescription for the OTC drug/medicine purchased to BPC for reimbursement.

You can find additional information on the BPC website at www.bpcinc.com or the IRS has posted additional details, including a helpful FAQ, about the OTC rule change on its Affordable Care Act website and includes links to the following:

BPC will be sending the necessary amendments regarding this OTC change for your plan documents before the end of the year. Standard amendment fees will apply.

If you have any questions or need additional information, please contact BPC at 217-355-2300 or 800-355-2350.

IRS Issues Guidance on OTC Changes for 1/1/2011

Tue, 18 Jan 2011 03:12:18 CST

On September 3rd, 2010, the Internal Revenue Service issued guidance IR-2010-95 reflecting statutory changes regarding the use of certain tax-favored arrangements, such as flexible spending arrangement (FSAs), to pay for over-the-counter medicines and drugs.

See the linked document above for the full release which includes FAQ.

EFAST2 Is Coming

Tue, 18 Jan 2011 03:07:23 CST

What is E-FAST2?

Beginning in 2010, the DOL will require that all Form 5500s be filed electronically through EFAST2. EFAST2 is short for electronic filing acceptance system part 2. It is an online system for submitting Form 5500s to the Department of Labor (DOL).

What changes will this bring for plan sponsors?

BPC will continue to prepare your Form 5500 as usual. However, you will notice the following changes in the forms and in our procedures:

Paper filings will no longer be accepted, except for the Form 5500-EZ used by one participant filers
Many small plans exempt from the audit requirement will now have the option of filing on the Form 5500-SF, which is a shorter form with no schedules
Plan sponsors will need internet access and a valid e-mail address
Individuals responsible for signing the Form 5500 will need to obtain “filing signer” credentials through the DOL website
You will be invited via e-mail to a “signing ceremony” where you will login to our website with your pre-approved credentials in order to electronically sign the forms.
We expect heavy use of the system at filing deadlines. Due to uncertainty of the system’s ability to process the anticipated level of high usage around deadlines, we strongly encourage all forms be filed a minimum of 2-3 weeks prior to your filing deadline
Plans subject to the audit requirements will need to have their audits performed earlier in order to ensure the forms and audit are filed timely
Plan sponsors will be required to retain a paper copy of the forms with a wet signature for their records as they always have in addition to the electronic processing. The paper forms will no longer have a bar code at the bottom.
ERISA 403(b) plans will also be subject to all of the above filing requirements

When will this change happen?

The EFAST2 system is expected to go live on January 1, 2010. All 2009 calendar year plans will be required to file using EFAST2. Any non-calendar year plans that have not filed by December 31, 2009, will need to file using EFAST2.

BPC wants to ensure these changes are as easy as possible for our clients. Over the course of the next few months, we will continue to communicate with you regarding the new filing requirements. We understand for some clients the new technological requirements may seem like a great burden. However, we will strive to make the process as easy as possible and will be available to walk you through the process.

Please watch for future communications from BPC regarding EFAST2.

BPC's CEO Fights for Flex Plans

Tue, 18 Jan 2011 03:06:19 CST

(Reprinted with permission from the News Gazette Saturday, August 1, 2009) [Permalink]

Benefit Planning Consultants, Inc. President and CEO Habeeb Habeeb is profiled regarding his passion for saving Flexible Spending Plans.

See the attached article for more!

Open Letter to President Obama from ECFC: Don't eliminate or curtail Flex Plans

Tue, 18 Jan 2011 03:05:05 CST

The Employers Council on Flexible Compensation (www.ecfc.org) (ECFC) urges the President, in an open letter, to not eliminate or reduce the tax benefits of flexible spending plans. See the attached document for a copy of the letter sent to President Obama yesterday.

Guest Commentary: BPC's CEO urges everyone to act now to save Flex Plans

Tue, 18 Jan 2011 03:03:30 CST

(Reprinted with permission from the News Gazette Sunday, August 2, 2009) [Permalink]

Act now to save your health care flex plans

By HABEEB HABEEB

In its rush to enact health care reform legislation, Congress may abolish or curtail flex plans, also known as FSAs. Your action is needed to tell them you want to keep your flex plan.

It is not that they dislike FSAs, but legislators need to raise revenue to pay for reform. We feel that capping or abolishing FSAs is a punch-in-the-pocket and a slap-in-the-face to the average working American who sets aside money to pay for medical expenses on a pre-tax basis. That saves the average taxpayer 25 percent in payroll taxes on every medical expense.

Should FSAs be eliminated or curtailed, it would mean a tax increase on average Americans already struggling to pay for health care. While health care reform is inevitable, FSAs must be preserved as a critical tool to save and pay for out-of- pocket medical expenses.

Why preserve FSAs? First, they are not a tool for the rich. The average salary of an FSA participant is $55,000.

FSAs help control health care costs by allowing participants to pay for co-pays, co-insurance, prescriptions and deductible expenses. In addition, many families use it to defray the high cost of dental treatments such as root canals and orthodontia and necessary vision expenses such as Lasik surgery, eyeglasses, and contact lenses. The most important use is to pay for chronic conditions such as high blood pressure and diabetes. Participants may forgo treatment if FSAs are unavailable, causing health costs to rise.

FSAs are not misused. Every expense must be verified to be eligible by an independent third party as a necessary medical expense under IRS code.

Most participants run out of money before the end of the year. Data over millions of claims show that there is no rush to spend at year-end as most people had exhausted their balances in the first three quarters. If anything, they wish they had set aside more funds at the beginning of the year.

Even though FSA funds are subject to the use-it-or-lose-it rule, very few participants lose any money and even then, the amounts are small. It would be better if the IRS abolishes the use-it-or-lose-it rule, encouraging more people to set aside money in their FSA account.

Eliminating FSAs would immediately raise the cost of medical expenses by 25 percent for most Americans.

The tax impact of paying for medical expenses with after-tax dollars will be devastating to at least 35 million Americans who rely on FSAs to help them save on three payroll taxes: Federal Income tax, State Income Tax, and FICA (Social Security and Medicare Tax). Federal income tax starts at 10 percent with many households paying 15 percent or more. State income tax is 3 percent, and FICA is 7.65 percent. Therefore most Americans would pay at least 25 percent more for their medical expenses (15 + 3 +7.65 = 25.65 percent) if FSAs are eliminated.

Americans are already struggling in a down economy. They don't need a tax increase on medical expenses.

Congressman Johnson has stated his opposition to capping or eliminating FSAs. Citizens are urged to contact U.S. Sens. Dick Durbin and Roland Burris and President Obama asking them to Preserve FSAs. Urge them not to eliminate nor curtail flex plans.

Habeeb Habeeb is President & CEO of Benefit Planning Consultants, Inc. in Champaign and a certified flexible compensation instructor. He is a member of the board of directors of the Employer's Council on Flexible Compensation, a national organization headquartered in Washington D.C whose goal is to preserve the tax exclusion for various employee benefits.

IRS Issues Interim Relief Regarding W-2 Reporting

Wed, 13 Oct 2010 12:00:00 CST

The IRS issued Notice 2010-69 which provides interim relief to employers from the mandatory reporting of the cost of employer-sponsored group health plan coverage on employees' Form W-2s beginning with the 2011 tax year. Further guidance is expected before the end of 2010 regarding the use of COBRA rules to determine the value of coverage and other issues that need clarification before reporting becomes mandatory.

The new draft W-2 tax form was also released Oct. 12, 2010. The draft includes a new code (DD) that employers may use to report the cost of coverage under employer-sponsored group health plans in Box 12. The amount reported with Code DD are nontaxable.

Additional information can be found on the following websites:

If you have any questions or need additional information, please contact BPC at 217-355-2300 or 800-355-2350.

OTC Changes Effective January 1, 2011

Sat, 8 May 2010 12:00:00 CST

As of January 1, 2011, Health FSAs and HRAs will not be able to reimburse over-the-counter (OTC) medicines or drugs (other than insulin) without a doctor's prescription; similar restrictions will apply to HSAs. Over-the-counter medicine expenses will only be reimbursable if participants have a prescription. Other OTC items such as medical supplies, that are not medicines or drugs, such as contact lens solution and bandages, will still be covered. This change aligns what is currently allowable as an IRS qualified medical expense deduction if you itemize your medical expenses with what will be allowed under an FSA/HSA/HRA plan.

This change is effective January 1, 2011 regardless of when the plan year starts or grace period that may be in effect for 2010 plan years. The change in OTC eligibility is not a change in status that will allow any mid-year changes to participant's elections.

BPC Benefits Card (flex debit card) users will not be able to use their cards to purchase OTC items on or after January 1, 2011. Because OTC medicines are no longer eligible for reimbursement without a prescription, they will not be listed in the IIAS eligible item list and therefore cannot be purchased with the card at IIAS merchants. Starting Jan 1, 2011, the participant will need to get a prescription from their medical provider, submit the prescription with the detailed receipt purchased and a signed claim form to BPC to be reimbursed for OTC medicine or drugs.

This change in eligibility for OTC drugs & medicines will require an amendment to all FSA plans, and any HRA plan that allowed OTC expenses. BPC will produce and send the required amendment(s) to you before the end of 2010.

BPC Implementing Secure Email Solution

Fri, 23 Apr 2010 12:00:00 CST

In order to maintain the confidentiality of private information and ensure compliance with privacy regulations such as HIPAA, HITECH, and Red Flag Rules, we are implementing a new email encryption service through Zix Corporation. The service will enable our organization to protect personal information, such as social security, driver's license, credit card, medical record numbers, and account numbers, from undesirable external parties on the internet.

Beginning Monday, April 26, 2010, electronic communications which contain confidential data sent between BPC and you will be encrypted. You will be able to receive and reply to our encrypted email communications easily, and with the knowledge that others will not be able to access that information.

If you do not currently have a ZixCorp email encryption password then you will be asked to click on a link in the email, which will connect you to our secure message center. There you will register a private password to retrieve and reply to our secure messages. This is a free BPC portal at no cost to you.

To learn more about our email encryption system, please go to: http://userawareness.zixcorp.com/sites/index.php?b=d31cd4752d24961493abf95c85b9c396&type=1&p=2. BPC is committed to protecting your personal and private information, and we're pleased to provide an easy-to-use solution that secures our shared email communications.

Legislative Alert: COBRA Premium Subsidy Extended for Two Months

Fri, 16 Apr 2010 12:00:00 CST

On Thursday afternoon April 15, 2010, the Senate approved H.R. 4851, the Continuing Extension Act of 2010 by a vote of 59 to 38. The House followed that action by passing the bill in the early evening by a vote of 289 to 112. President Obama signed the bill, which provides for a two-month extension of the COBRA premium subsidy (through May 31, 2010). Originally, H.R. 4851 called for a one-month extension (through April 30, 2010) of the COBRA premium subsidy. However, during the debate, the Senate adopted an amendment offered by Finance Chairman Max Baucus, which further extended a number of provisions in the bill, including the COBRA premium subsidy.

It is very likely that Congress will continue this approach – a series of short-term fixes, rather than a longer extension – for the remainder of the year.

COBRA Subsidy Extension Clears Procedural Hurdle in Senate

Tue, 13 Apr 2010 12:00:00 CST

Late yesterday afternoon, the Senate, by a vote of 60 to 34, invoked cloture on the motion to proceed to H.R. 4851, the Continuing Extension Act of 2010. Among other items, H.R. 4851 provides a one-month extension of the COBRA premium subsidy through April 30, 2010. The extension would be retroactive until April 1. The Senate expects to take up the measure on Tuesday with a vote on final passage expected on Thursday. Four Republicans -- Senators Scott Brown (MA), Susan Collins (ME), Olympia Snowe (ME), and George Voinovich (OH) -- voted in favor of cloture on the motion to proceed. We will provide additional information as it becomes available.

Legislative Update

Wed, 31 Mar 2010 12:00:00 CST

Historic Health Care Reform legislation has been enacted. BPC and our industry group worked tirelessly this past year to advocate for Flex plans. While some restrictions on FSAs remain part of the Health Care Reform package, the outcome for FSAs is far better than the changes initially proposed. Both H.R. 3590, the Patient Protection and Affordable Care Act (PPACA) and H.R. 4872, the Health Care and Education Reconciliation Act of 2010 (the Reconciliation Act) have become law.

Below is a brief summary of the parts of these new laws, as we currently understand them, that effect Cafeteria plans, Health FSAs, HRAs and HSAs.

FSA CAP. Health FSA salary reductions are limited to $2,500 each year. The cap is effective for tax years starting on or after January 1, 2013. It is indexed for inflation beginning in 2014.
OVER-THE-COUNTER REIMBURSEMENTS. Over-the-counter medicines or drugs are not eligible for reimbursement under an FSA, HRA or HSA unless prescribed by a doctor. This is effective for tax years beginning on or after January 1, 2011.
HSA DISTRIBUTIONS. The excise tax for nonqualified distributions from HSAs is increased from 10% to 20% for individuals under age 65, effective for distributions on or after January 1, 2011.
SIMPLE CAFETERIA PLANS. A new safe harbor from the nondiscrimination requirements for cafeteria plans of small employers is provided in PPACA. A Simple Cafeteria Plan requires an eligible employer to meet certain contribution, eligibility, and participation requirements. An eligible employer is an employer with 100 or fewer employees during either of the two preceding years. The Safe harbor applies to tax years beginning on or after January 1, 2011.
DEPENDENT COVERAGE FOR ADULT CHILDREN. Group health plans (insured and self- funded) offering dependent coverage for children must continue providing that coverage for adult children (married or unmarried) until age 26. The coverage for such children will be nontaxable. This is effective for plan years beginning 6 months or more after the date of enactment (Sept. 23, 2010). Coverage would not have to be offered by grandfathered group health plans to an adult child eligible for coverage under another employer- sponsored health plan until 2014.

Electronic Statements

Thu, 18 Feb 2010 12:00:00 CST

Beginning March 15, 2010 BPC will be rolling out a new electronic statement system. We are excited to bring this feature to your benefit accounts. We will be automatically creating electronic versions of some of the documentation you previously received at your home address.

Electronic-only documents include:

Explanations of Benefits for Direct Deposit Notifications
Quarterly Account Summary Statements

You will automatically be notified by email whenever a new statement is made available on our website.

As a bonus, this initiative will have the added benefit of making these documents available to you for download for a period of 3 years after they are first issued.

We would encourage you to visit bpcinc.com/paperless for additional details about this initiative.

Contact Senators on Health Care Reform Today!

Wed, 9 Dec 2009 12:00:00 CST

As you know, the Senate is currently debating the Patient Protection and Affordable Care Act. We urge you to contact Senate offices as soon as possible by calling (202) 224-3121, and urge your senators to adopt the Schumer amendment. See below for details:

It is our understanding that Senator Schumer (D-NY) later today plans to file an amendment to apply an inflation index of CPI plus 1 percentage point to the $2,500 cap imposed on flexible spending accounts (FSAs).

We strongly encourage clients to reach out to their Senators and urge them to join in cosponsoring Senator Schumer’s amendment. Senate offices interested in cosponsoring the amendment should contact Jeff Hamond with Senator Schumer’s office.

As we have previously reported, efforts are very much underway to get an FSA inflation index incorporated into the “manager’s amendment.” Senator Ben Nelson (D-NE) has voiced his support for such an action to the Democratic leadership. Getting strong co-sponsorship of the Schumer amendment will help further demonstrate support for the FSA index.

Points to Make

More than 35 million Americans rely on their FSAs to meet their health care needs.
The average annual income for an FSA participant is $55,000.
FSAs are particularly important for patients with chronic illnesses, who even with comprehensive coverage, can face thousands of dollars in total out of pocket costs.
Most insurance plans do not cover the full cost of care for conditions such as autism, or services, such as wheelchair repairs.
The legislation will have a devastating effect on Americans who rely on their FSAs.
First, the cap is much lower than what most states and the federal government allow their employees to set aside. Federal employees currently can set aside $5,000. State employees in more than half of all states can set aside $5,000 or more.
Second, since the cap is not indexed to inflation, the bill effectively eliminates FSAs over time.
That outcome is totally counter to the pledge made by many policy makers and President Obama – that is, if you like what you have you can keep it. And it will have a negative impact on Americans with chronic illnesses and those with middle-class incomes.
I strongly encourage the Senator in joining in co-sponsoring the Schumer amendment.

Decrease of 7.5 Cents in 2010 Mileage Rate for Transportation to Obtain Medical Care or as Part of Deductible Moving Expenses

Fri, 4 Dec 2009 12:00:00 CST

[Rev. Proc. 2009-54 (Dec. 3, 2009)]

For a copy: http://www.irs.gov/pub/irs-drop/rp-09-54.pdf

For a copy of the press release:

http://www.irs.gov/newsroom/article/0,,id=216048,00.html

The IRS has announced that the standard mileage rate for use of an automobile to obtain medical care (which may be deductible under Code Section 213 if it is primarily for, and essential to, medical care) will be 16.5 cents per mile for 2010. This is a 7.5 cent decrease from the 2009 rate of 24 cents. An IRS press release attributes the decrease to a general reduction in transportation costs.

BPC Launches 2 New Calculators to Illustrate Effects of Healthcare Reform

Fri, 2 Oct 2009 08:40:00 CST

BPC is pleased to announce the release of two new calculators to further enhance employee and employer knowledge regarding proposed legislation for healthcare reform. These calculators are designed to illustrate how the elimination or alteration of existing benefit plans may affect taxable income for individuals and companies.

Employee Effects on FSAs:This calculator demonstrates how employees will be hurt by any reform which hinders the use of health flexible spending accounts as a method for paying for medical expenses pre-tax. Employees can choose from one or more common expenses to illustrate the change in out-of-pocket costs that would result from the elimination of FSAs. [Access the Calculator]
Employer Effects on Health Plans: Employers who do not offer a health plan may be subject to certain penalties under proposed legislation. This calculator illustrates the total dollar value of that penalty and compares the penalty to the tax advantages offered by providing a health plan and gives a bottom line to show whether your company would be better off to provide some health option to all employees. [Access the Calculator]

BPC is committed to informing employees and employers about their options for improved healthcare and is active in lobbying the Federal government for improvements to the healthcare system which don’t restrict options or pile undue or unnecessary costs on individuals and businesses.

New ARRA rules increase the combined transit pass/vanpooling monthly limit to $230 effective March 1, 2009

Sun, 1 Mar 2009 12:00:00 CST

COBRA affected by stimulus package

Tue, 17 Feb 2009 12:00:00 CST

Mileage Rate Decrease

Mon, 24 Nov 2008 12:00:00 CST

In announcement 2008-131 the IRS lowered the reimbursement rate for mileage expenses incurred on or after January 1, 2009 to receive medical care. Effective January 1, 2009 the new mileage rate is 24 cents (down from 27 cents in IRS Rev Proc 2008-63).

BPC Benefits Card Usage - IIAS Update

Thu, 30 Oct 2008 12:00:00 CST

Update: IRS Bulletin 08-104 has extended the Pharmacy IIAS deadline to June 30, 2009

As of June 30, 2009 the federally mandated IIAS initiative will go into effect for pharmacies. This system will limit the locations you can use your benefits card to those vendors whose systems comply with IIAS. For more information on IIAS and how it will affect you click here. Walgreens will continue to work as it does now.