FSA Rollover Loses Again

The FSA  rollover provision sent to a House-Senate conference committee was quietly dropped again when the pension bill went back to the House last Friday. The reason: the bill would have cost $20 billion in tax expenditures over 10 years, way too much when the conferees were trying to expand IRAs while keeping the cost below $100 billion.

This is the second time a bill backed by the Republican House leadership failed to make it into law allowing FSAs to rollover. The first time was in the original MMA bill which created HSAs. This is a clear signpost of what would have happened if the President’s HSA expansion bill or the Cantor bill had made it through the House this year. The cost of those proposals were way north of $150 billion over 10 years. They were non-starters.

There was some good news for HSAs. The revised pension bill, which passed the House over the weekend and is on the Senate floor this week, allows employers to automatically enroll employees in pension plans – possibly including HSAs. Other provisions strengthen the ability of employers to automatically deposit money into pension plans.

Fully story later this week when the Senate finishes.