Friday, September 24, 2010

Health Care and FSAs in the New Health World

This article was originally published by Benefits Selling Magazine online on September 23, 2010. Thanks to them for promoting the material.

With all the new health care legislation passed this year, many are wondering how flexible spending accounts will be affected. According to, the new health care reform legislation impacts flexible FSAs in the way over-the-counter medications are handled and increases taxes on nonqualified distributions.
Beginning in 2011, FSAs cannot make reimbursements for the cost of over-the-counter medications, such as nonprescription pain relievers, cold medicines, antacids and allergy medications. However, insulin and over-the-counter medications prescribed by a physician will still be reimbursable on a tax-favored basis by these plans. You may want to stock up on your over-the-counter drugs to take advantage of the available reimbursement before the end of this year.

The IRS also resolved uncertainty involving the new over-the-counter restriction on what are known as “grace period” FSAs. Under rules the IRS issued in 2005, unused contributions made to FSAs in the current year can be rolled over to pay for expenses incurred during the first two and a half months in the following year. The new IRS rules say over-the-counter reimbursements are banned for grace-period FSAs and FSAs without grace periods effective January 1, 2011. Congress imposed the new limits to raise revenue to help pay for other provisions in the reform law that expand coverage, such as new federal insurance premium subsidies for the lower-income uninsured, beginning in 2014.

If you participate in an FSA as part of a cafeteria plan, beginning in 2013, the annual amount available for reimbursement for qualified medical expenses is limited to $2,500. This figure is adjusted for inflation in subsequent years, and the reduction does not apply to health FSAs that aren’t part of a cafeteria plan.

And, to cap off the new FSA regulations, you need to know the fine print in the new law, according to Wolters Kluwer. Effective for tax years beginning after Dec. 31, 2012, a health FSA is not a qualified benefit under a cafeteria plan, unless the plan provides for a $2,500 maximum annual salary reduction contribution to the FSA. If the plan does not specifically prohibit salary reductions in excess of $2,500, the benefit under the health FSA is not qualified.

Under such circumstances, an employee is subject to tax on distributions from the health FSA, thereby, eliminating any of the tax benefits of health FSA contributions, including those under $2500. There is a silver lining to the new limitation in that it protects employees from large forfeitures and protects employers from employees who game the system by signing up for large amounts, submitting large claims early in the year and then terminating employment, leaving the employer stuck with the bill.

And there are state tax consequences. The limitation of FSA contributions to $2,500 for tax years after 2012 does not impact states that conform to the federal exclusion by the time the provision takes effect. Because most states start their tax calculations with federal adjustable gross income, there should be no impact on those states. States that do not conform may allow an exclusion from taxation for amounts above the federal limitation, as well. Effective for tax years beginning after December 31, 2013, the $2,500 limitation is adjusted annually for inflation. Any inflation adjustment that is not a multiple of $50 is rounded down to the next lowest multiple of $50.

Until next time. Let me know what you think.

Friday, September 10, 2010

Health Care and 9/11--Nine Years Later

On a bright, sunny day on September 11,2001, just a short nine years ago, the world changed forever at 8:46 a.m. Eastern Time when the first of four passenger planes were highjacked by terrorists. According to, American Airlines Flight 11 impacts the north side of the North Tower (1 World Trade Center) of the WTC between the 94th and 98th floors. American Airlines Flight 11 was flying at a speed of 490 miles per hour (MPH), killing everyone on board. Minutes later, at 9:02:54 a.m., United Airlines Flight 175 impacts the south side of the South Tower of the WTC between the 78th and 84th floors at a speed of over 500 MPH, killing everyone on board. Parts of the plane including an engine leave the building from its north side, to be found on the ground up to six blocks away.

According to, what happened next was another horrific scenario taking place in Washington, DC, only a few minutes later. At 9:37 a.m., American Airlines Flight 77 is lost from radar screens and impacts the western side of the Pentagon, erupting in a huge fire ball and killing everyone on board. The section of the Pentagon hit consists mainly of newly renovated, unoccupied offices. Next, the unthinkable happens. At 9:59:04 a.m., the south tower of the World Trade Center suddenly collapses, plummeting into the streets below. A massive cloud of dust and debris quickly fills lower Manhattan. Several hundred miles away over the verdant green pastures in Southwestern Pennsylvania, another tragedy in this ongoing story is about to happen. About four minutes after the first collapse of the Twin Towers in New York, at 10:03 a.m., according to the FBI, the cockpit voice recorder stops and United Airlines Flight 93 crashes near Shanksville, Pennsylvania, in Somerset County, about 80 miles southeast of Pittsburgh.

Now, finally, as inconceivable as it was incredible the final blow happens only a short few minutes after the fourth airliner is down. At 10:28 a.m., the North Tower of the World Trade Center collapses. As the world watches in stunned amazement and disbelief, the lives of over 3,000 individuals had been snuffed out like a candle by the worst terrorist attack ever to take place on American soil. Over and over and over all day long, the images of these tragic events were played by every TV station on the planet while Americans sat in utter horror and despair. What had happened? How could this have taken place, and who was responsible? What would the nation do to recover? Questions lingered for days and weeks like the heavy smoke over the debris in lower Manhattan.

Since those events took place, America has been in a protracted war on terror against enemies both foreign and domestic. The lives of thousands of service men and women have been lost in the conflict, but the health of the nation they protect has been kept secure. However, the health of individuals affected by 9/11 has been studied over the past nine years has had some significant medical implications for those who were involved. According to, more than 400 New York City firefighters and police officers lost their lives as a result of the terrorist attack on the World Trade Center (WTC). Many other people at the scene that day and in the weeks that followed also witnessed horrific events at close range, including the loss of colleagues and the gruesome recovery and removal of body parts. In addition, more than 91,000 rescue, recovery and clean-up workers, and volunteers—including virtually all of the Fire Department of New York (FDNY)—were exposed to the environmental hazards at Ground Zero during their work on “the pile” and at other WTC-related locations in the days and months that followed.

Nearly 4 percent of the 25,000 rescue and recovery workers enrolled in the World Trade Center Health Registry report developing asthma after working at the WTC site according to a survey conducted in 2003 and 2004, according to This rate is higher than what normally would be expected for the adult population during such a time period. Analysis of survey data indicated that arriving soon after the buildings collapsed, or working on the WTC pile over a long period, increased the workers’ risk of developing asthma. Workers who arrived on September 11, 2001, and worked more than 90 days reported the highest rate of new asthma (7%). FDNY members, nearly all of whom responded to Ground Zero within the first week of the attacks, suffered the most intense degree of exposure to the toxic mix of dust and chemicals at Ground Zero.

On September 11, 2001, approximately 25,000 children were living or attending school in lower Manhattan, some in close proximity to the WTC, according to Within hours of the disaster, the New York City Board of Education provided principals and teachers with guidance on addressing the immediate needs of students. The Board recognized, however, that children in public schools needed immediate, expanded mental health services—including grief counseling, early intervention for post-traumatic stress disorder, and assistance managing fear, anxiety and anger—that could not be provided by the existing staff of school-based mental health professionals. Additionally, more than 400,000 people were in lower Manhattan the morning of 9/11, including thousands of office workers, small business owners, city employees, visitors and others. They fled at different times after the attacks. Some found their offices and stores buried under dust and debris when they returned. Others worked for months where the dust was less visible. Because of different exposures, it has been more difficult to determine how this group’s health was affected by 9/11.

According to, since the 9/11 event, a cough has been developed by people working at and near ground zero. They thought the cough would eventually go away - unfortunately, they have intensified and the number of victims is growing. It seems the cause of these respiratory conditions is simply being in or near the area where the buildings collapsed. The scale of the consequence of breathing in the asbestos-laden dust is still unclear, although the complaints are in the thousands of individuals, including several thousand firefighters with various respiratory complaints. Not only was there asbestos in the air. There was lead from smashed computers as well.

According to, first responders and New York City residents are now dying of mesothelioma and being sickened with other asbestos-related disease. Doctors and scientists have long predicted that, in years to come, the nation would be seeing an onslaught of mesothelioma cases in greater New York City, caused by the tons of asbestos that rained down on fire fighters, police officers, paramedics, and those who lived and worked near the World Trade Center. At the time of the disaster and for some time afterwards, most of Lower Manhattan was covered with a grayish dust--what’s been reported as a frightening combination of substances such as glass shards, asbestos, fiberglass, pulverized concrete, lead, mercury, cadmium, dioxins, and PCB’s. Many first responders suffered almost immediate health problems, and those who’ve studied the potential hazard of asbestos caused by the collapse of the World Trade Center estimate that more than 110,000 people may have suffered serious exposure. These same reports show that in the haste to clean up the debris, proper precautions were not taken to protect workers from harm nor were standard and necessary asbestos abatement procedures followed. This resulted in even more exposure.

Currently, Congress is debating health care legislation that will help to compensate these victims of 9/11, especially in the collapse of the WTC towers in New York. Although the events were tragic and life-altering, the need to provide assistance to these families and individuals should not be overlooked. A House version failed to pass during the summer, but with renewed support from the White House, a revised bill may be introduced this fall for passage.

Since September, 2001, Americans have fought to keep their lives normal. But those who witnessed the events in New York, DC, and Pennsylvania will always be affected on a personal level for the rest of their lives. According to the National Institutes of Health, in addition to hazardous chemical and physical environmental exposures, the working conditions at the WTC involved exposures to serious psychosocial stressors, including long hours and arduous work, treacherous and chaotic working conditions, fear for personal safety, and handling body parts and personal effects of victims, or working in close proximity to such operations. Post Traumatic Stress Disorder (PTSD) prevalence has been comparable to that seen in returning Afghanistan war veterans and was much higher than in the U.S. general population. Comorbidity has been found to be extensive and included extremely high risks for impairment of social function. PTSD was significantly associated with loss of family members and friends, disruption of family, work, and social life, and higher rates of behavioral symptoms in children of workers; and psychological distress and psychopathology in WTC workers greatly exceed population norms.

As America observes the ninth anniversary of 9/11, the country has rebounded with a spirit that has kept the spiritual and emotional levels intact. Of course, the nation struggles daily with the war between good and evil. Religious tolerance is still an ongoing battle as the division between Christianity and Islam continues to widen, even though many are working toward resolution of ideological differences. The eternal conflict between the forces of darkness and the forces of light is not going away. The US armed forces are still in a protracted effort to maintain peace in areas of the world that hate America and all for which it stands--freedom, love of country, national pride, capitalism, and family values. Although the long term effects have yet to be determined, enough time has elapsed to show that the physical health of those most closely associated has been profoundly affected. Also, the mental stress has had lingering effects on everyone who experienced the events first hand on that day. The nation is dealing with the ongoing nature of an event that changed the way people function--travel, security, healthcare, finance, and more.

As long as there are Americans, the nation will remember what happened on September 11, 2001. We will never forget!

Until next time. Let me know what you think.

Thursday, September 2, 2010

Health Care and Labor Day

Labor Day--the last major holiday weekend of the summer season is fast approaching, and in a few days millions of Americans will be hitting the road for a vacation destination that will be short lived but well deserved. Before the hectic final quarter of the year sets in and Thanksgiving and the Christmas Season comes around, the time to relax for a brief but enjoyable time with family and friends is what the majority of people in the US look forward to as the last breath of the Summer. Children in many parts of the country start back to school after this weekend, and the end of the year after Labor Day is typically the final hard charging days of business for most companies for 2010.

According to the US Department of Labor (DOL), Labor Day, the first Monday in September, is a creation of the labor movement and is dedicated to the social and economic achievements of American workers. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country. In the early years of this celebration going back to the 1880's, the form that the observance and celebration of Labor Day were outlined in the first proposal of the holiday — a street parade to exhibit to the public "the strength and esprit de corps of the trade and labor organizations" of the community, followed by a festival for the recreation and amusement of the workers and their families. This became the pattern for the celebrations of Labor Day.

The character of the Labor Day celebration has undergone a change in recent years, especially in large industrial centers where mass displays and huge parades have proved a problem. This change, however, is more a shift in emphasis and medium of expression, according to the. Now, according to the DOL, speeches by leading union officials, industrialists, educators, clerics and government officials are given wide coverage in newspapers, radio, and television in observance of the holiday. The vital force of labor added materially to the highest standard of living and the greatest production the world has ever known and has brought us closer to the realization of our traditional ideals of economic and political democracy. It is appropriate, therefore, that the nation pay tribute on Labor Day to the creator of so much of the nation's strength, freedom, and leadership — the American worker.

Labor Day is a weekend of fun, excitement, and enjoying the last days of summer. The last thing anyone wants to do is end up spending their time in the emergency room, but hundreds of people each year find themselves in that exact place wondering how injury or even death could have been prevented. Here are a few easy and useful tips on how to keep your Labor Day injury and accident free, according to

First, Labor Day is often a day of busy traffic and congested roads and the number one cause of injury and death during the holiday is vehicle related. To ensure you get wherever you are going in one peace, do a quick check on your car before traveling over the holiday weekend. First, make sure your coolant levels are sufficient to combat the last of that summer heat, then do a check on other essential fluids like oil and power steering. After that, check your tires to make sure that they are filled properly and aren't wearing thin anywhere. A blowout or flat tire is the last thing anyone needs while trying to enjoy themselves. A few minutes before heading out to check the fluid and tires will save you having to try and find an open mechanic on a holiday weekend. The next thing to consider regarding driving is something that may seem obvious, but make sure that you or the person driving is not tired or intoxicated. Having a delayed response time is not a good idea at any point while driving, but is particularly hazardous on a weekend where there are higher numbers of drivers on the road.

Secondly, in regards to personal safety during events, be smart and don't take unnecessary risks. This doesn't mean that you can't go out and water ski or bungee jump, but make sure you are taking a calculated risk and are using appropriate safety gear for whatever sport or activity you choose to involve yourself in. Stay hydrated, don't forget to eat, and if you're drinking, don't drive or operate machinery of any kind. Driving a boat drunk is still drunk driving! Also, remember that drinking impairs judgment and causes you to dehydrate so make sure you're drinking water during or after your time drinking. Beyond ensuring that you don't cause serious dehydration, it will help you avoid that hangover the next morning.

Third, another thing to consider is bugs and wildlife in the great outdoors. For most the consideration will only be mosquito and spider bites, but educate yourself on the area you will be staying to make sure there aren't other critters you need to consider. Snakes, poisonous spiders, and even coyotes and bears may be something you need to be aware of if you're out camping or hiking. Having a well-stocked first aid kit with you is essential to treating any injuries or bites that may occur while you are out.

Fourth, don't assume that any place is child-proof or that they notice faults or hazardous conditions regarding their equipment or tools. Be careful when renting tools that upon inspection they do not have hazardous wiring conditions, loose parts, and various other problems. Look at safety gear issued with sponsored rafting events and kayaking trips that do not have defects that could prove deadly if you do not take the time to inspect it before being given to you by the rental company. Don't assume that safety gear is automatically in good shape. Take the few extra minutes to make sure all fasteners, buckles, and other devices are in good working order before trusting your life to them.

Finally, the most important factor in preventing injury is educating yourself. Look up safety on the things you will be doing from grilling to getting in some last minute building projects over the holiday weekend. Look up things like the 101 Critical days of summer which is a military initiative for summer safety to minimize troop injury and death during the summer. Ultimately safety is everyone's responsibility, take a few precautions for yourself and your friends and make the weekend something to remember for years to come with the fun you have, not the injuries you sustain.

And remember the addage about drinking and driving---they don't mix. According to, the U.S. Department of Transportation Wednesday kicked off the annual “Drunk Driving. Over the Limit. Under Arrest.” campaign aimed at getting drunk drivers off the road. The National Highway Traffic Safety Administration (NHTSA) also released new data indicating that eight percent of all drivers, as many as 17 million people, have driven drunk at least once during the past year. The law enforcement crackdown will run through Labor Day and will involve thousands of police agencies from across the nation. Drunk driving is deadly, it’s against the law, and unfortunately, it’s still a problem. Their message is loud and clear. If you drive drunk you will be arrested and prosecuted. There will be no exceptions and no excuses. And if you’re below the age of 21, there is zero tolerance for any alcohol in your system whatsoever.

Have fun this Labor Day weekend. Enjoy the time off, and relax until the rat race heats up again after Monday. But remember to heed the suggestions about safety and your health so you can savor the memories of good times, not bad experiences due to lack of common sense and proper planning.

Until next time. Let me know what you think.