Source: United States House of Representatives – Congresswoman Cindy Axne (IA-03)
Today, Rep. Cindy Axne (IA-03) joined Rep. Brad Wenstrup (OH-02) and Rep. Mike Kelly (PA-16) to introduce bipartisan legislation that will allow Iowans to further utilize leverage tax-advantaged and tax-free benefits accounts to cover essential expenses during the coronavirus (COVID-19) outbreak.
“The uncertainty and burden of COVID-19 is impacting everyone’s budget – and it’s creating tough financial challenges for families,” said Rep. Axne. “I’m proud to lead this bipartisan effort to expand tax benefits for our working families in need during this economic downturn. It is more important than ever that we give Iowans tools to ensure their children are cared for and their health is protected, and I am glad this legislation will help Iowans hard-earned dollars go further.”
The Family Savings Flexibility Act would nearly double the maximum annual contribution for health savings accounts (HSAs), a tax-advantaged employee benefit that can be used to help pay for qualified medical expenses like doctor’s office visits and procedures, prescription drug costs, and dental and vision care.
“We should not penalize Americans who diligently saved their hard-earned money for healthcare and childcare. As we emerge from coronavirus shutdowns, we must provide flexibility to those who were unable to use their health FSA or DCFSA funds due to delays in procedures and services. Our bipartisan bill provides the necessary fix for these Americans, and I’m grateful to Representatives Axne and Kelly for helping lead this effort,” said Rep. Wenstrup.
“Americans, now more than ever, need flexibility when it comes to their health care and child care services. The coronavirus pandemic has prevented Americans from using HSA and DCFSA savings for these purposes, so Congress must act to extend the time limit on spending these funds. By doing so, we can empower patients and parents during a time of unprecedented economic uncertainty,” said Rep. Kelly.
By tying the contribution limit to the current out-of-pocket limit for high-deductible health plans – $6,900 for individuals and $13,800 for family coverage this year – the bill would allow Iowans with qualifying health plans, regardless of their employment status, to contribute more of their pre-tax dollars to afford health care for themselves and their families.
Currently, those with HSAs can contribute a maximum of $3,550 for individual coverage and $7,100 for family coverage.
Additionally, the legislation would amend employee flexible savings accounts (FSAs) and dependent care assistance plans (DCAPs) to reflect the impact of COVID-19 on Iowans’ ability to access child care and regular medical care. By allowing individuals to roll over unused FSA and DCAP contributions to next year, Iowans would be spared from losing thousands of dollars they’ve previously contributed to these accounts.
The bill introduced today includes child care affordability provisions that Rep. Axne has advocated for in other legislation, including bipartisan bills to double the DCAP contribution limit and to allow a one-time DCAP rollover in response to the coronavirus.