Mr. CARDIN. Mr. President, I rise to introduce the Medical FSA Improvement Act of 2013. I wish to thank my friend and colleague, Senator Enzi, for joining me in this effort. Our bill would amend the Internal Revenue Code to allow employees who use health flexible spending arrangements, FSAs, to cash out any remaining balance in their account at the end of a plan year. This provision replaces current IRS policy in which any unspent FSA funds revert to the employer at the end of the plan year for activities related to plan administration.
FSAs are an important benefit for all workers as they allow employees to set aside pre-tax dollars to pay for out-of-pocket health care expenditures, including dental and vision services. Many families count on their FSAs to help cover their monthly expenses for prescription drugs, co-pays for doctors' visits, children's dental care, and medical equipment and supplies for disabled family members.
In an economy where every penny counts, it just does not make sense for employees who may have overestimated their anticipated yearly out-of-pocket health care expenditures at the beginning of a plan year to be penalized by having to forfeit unspent funds to their employer at the end of a plan year. It also leads to wasteful spending when employees try to avoid forfeiting their FSA balances by rushing at the end of a plan year to purchase unnecessary health-related items, such as multiple pairs of eyeglasses.
One-third of the Federal workforce currently use FSAs, as do millions of State, county and local public employees, and workers in private industry. We should encourage employees to put money into FSAs to help defray their out-of-pocket health care costs, to use these funds wisely, and not have them fear losing hard-earned money at the end of a plan year just because their health care expenditures may be less than anticipated.
I urge my colleagues to support this bipartisan legislation, which will help America's working families better manage their personal finances.