AAO urges Congress to repeal FSA “use-it-or-lose-it” rule

Dentistry coalition led by AAO urges Congress to repeal FSA “use-it-or-lose-it” rule

Members of the Organized Dentistry Coalition, the American Association of Orthodontists (AAO), and the American Dental Association (ADA) have urged Congress to back legislation aimed at abolishing the “use-it-or-lose-it” rule for flexible spending accounts (FSAs). The new legislation will allow consumers to carry forward the balance over several years.

Currently, the “use-it-or-lose-it” rule mandates families to use the entire balance in a single year and restricts them from carrying forward the balance to the next year.

Meanwhile, the Responsible Additions and Increases to Sustain Employee Health Benefits Act or the RAISE Act will increase the existing FSA annual cap from $2,500 to $5,000, allowing families to curtail out-of-pocket medical costs and save an extra $500 annually for each additional dependent. Representatives Steve Stivers, Roy Blunt, Vicente Gonzalez, and Kyrsten Sinema reintroduced the bipartisan RAISE Act in the 116th session of the Congress.

Flexible spending accounts allow consumers to pay for healthcare services that are usually not available for insurance coverage such as dental services, prescription drugs, copayments, and eye care. With these accounts, individuals can allocate a certain sum of money before tax to pay for uncovered medical services.

The dental coalition submitted a letter to the Senate Committee on Finance and House Committee on Ways and Means, on March 1, 2019, urging legislators to repeal the “use-it-or-lose-it” rule.

According to AAO President Brent Larson, approximately 63 percent of AAO members’ patients rely on FSAs for orthodontic care. He welcomed the RAISE Act saying more families will be able to save for their medical needs. He also urged Congress to finish the good job that they have started and restored the control of healthcare spending back into the hands of consumers.