Nov 2, 2009 8:24 AM by Associated Press

Flex spending accounts face hit in health overhaul

A health care legislation provision that would cap an employee's annual contribution to tax-free health care spending accounts is running up against opposition from an odd assortment of groups. Bills in the House and Senate would cut off employee contributions at $2,500 for the accounts that help them pay for dental work, insurance copayments or over-the-counter drugs.

Capping contributions would raise more than $13 billion over 10 years to help pay for the health care overhaul. A group called Save Flexible Spending Plans, which is backed by insurers, companies and a powerful union, is running a limited print ad campaign against the cap, calling it a "definite tax on the middle class, particularly those with chronic illnesses."

A Senate Finance Committee spokeswoman, however, says the impact would be limited, since data suggests the average contribution to the plans in 2008 was under $1,400.




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