Except it was clearly intended for this to happen. You have to understand the thought process, only rich people have enough money to use for FSAs or HSAs, therefore they want to make it as difficult as possible to use them. The endgame is of course single payer government healthcare.

That topic also came up in the "well-fed writer blog" in the latest post entitled "What’s a Commercial Freelancer to Do about Health Insurance?"

This law is only one of many forces driving up the cost of healthcare. The biggest is the prevalence of low-deductible health insurance.

I tried (and failed miserably) to sell insurance for a couple of years. (Turns out that understanding how it works and being able to sell it are unrelated skills.) One of the big problems that I ran into was that people want insurance that pays "everything." Problem with that is similar to getting auto insurance that also covers oil changes (with a $20 deductible, of course) and wiper blades ($15 deductible), etc. All for the convenience of just one monthly bill -- for about 4 times what it would normally cost to buy your own oil changes and wiper blades.

Any attempt to explain how that worked invariably fell on deaf ears.

It was deliberate an attempt to ruin the HSAs. They are not just for rich people. Many companise started using them in conjuction with high deductable insurance. Mine did and we all love it. It majorly cuts down on company costs cost, and cuts down on what the insured person pays.
But you can't force single payer gov't run health care on people if they have a viable alternative, so first you have to poison the alternative. A little this time a little more next time so it will be crippled soon enough.

ParaJJ is thinking what I am thinking...

you break something irrevocably so you can get rid of it, without saying you are doing so...

If you look at the direction and the endgame, O-care is aimed at this. It's not designed to fix anything.

>>>only rich people have enough money to use for FSAs or HSAs..."

What? FSAs and HSAs are a great way to SAVE your money from going into the hands of the insurance companies. They're tax free (unlike 401ks and IRAs which are tax deferred), you can pay your premiums with the money you've put in them, and you buy a low cost, high deductible plan with them. If you spend the money you put in it, you've still gotten a tax break on that money, and if you don't, that money is still yours. How often have you written to your insurance company asking for a refund on your premium because you didn't use your insurance very much and had them give it to you?

The new requirements were written because people were taking advantage of the law stating that the money could be used for over the counter meds. They just didn't realize the unintended consequences of the law - people pay attention to where they can save on taxes and they took full advantage of it! So they're changing the requirements, and as Amy states, there are unintended consequences - people are figuring out a way around the new requirements!

The problem is that these bonehead policitians aren't considering the consequences as they write these new laws. If they were to THINK THROUGH their ideas we'd all be better off. Our tax laws are ridiculously burdensome (if you don't think so, try doing a tax return with a few deductions like mortgage interest and an HSA!) and we need some sanity!!

you can pay your premiums with the money you've put in them

Are you sure about this? The accountant in my company told me that they cannot be used for insurance premiums. It's still worthwhile though, rich or not, b/c it means you're paying medical bills with pre-tax rather than after-tax dollars.

It depends on whether your premiums are already taken out of your paycheck pre-tax. If so, you've already received the tax benefit.

No, I pay my premiums separately. Still, I was told that you can't use the flex account for premiums.

kishke, most FHA's offerred thru employers are usually deducted from paychecks pre tax, up to some magic maximum amount. And some employers match your contributions .... that match may be what your acct was referring to. I had an HSA attached to a high deductible account and loved it. Could carry the unspent money forward so that if you had a big expense, you could usually pay your max out of pocket, and if not, it could roll into an IRA

I just checked the IRS site. FSA's cannot be used to pay insurance premiums. See page 17 at the link:

http://www.irs.gov/pub/irs-pdf/p969.pdf

"Fancy what a game of chess would be if all the chessman had passions and intellects, more or less small and cunning; if you were not only uncertain about your adversary's men, but a little uncertain also about your own . . . You would be especially likely to be beaten if you depneded arrogantly on your mathematical imagination, and regarded your passionate pieces with contempt. Yet this imaginary chess is easy compared with a game man has to play against his fellow-men with other fellow-men for instruments."

George Eliot wrote the above in 1866. Some people still haven't figured it out.

An FSA is a sucker's bet. You have to gauge how much you expect to spend in a year.

The HSA might be worth it. But your company has to offer it.

Doctors will eventually do what they are doing here... if I need a perscription or a referral I just call the office, and the secretary does it. My doctor doesn't bother.

Or the doctors will do what mine did when I kept getting viral sinus infections that if I didn't keep clear would go into bacterial sinus infections ... give ridiculous long prescriptions. I had a prescription for a super strong decongestant for up to 3 pills a day for a whole year. The instructions were to take them whenever I started to get congested ... and to call him if they stopped working or blood started coming out of my nose.

I'm trying FSA this year. I underestimated of course, but between what dentists and orthodontists charge, I don't think I'll have a problem using it up.