IRS Ruling on FSAs Demonstrates AOA is Heard and Gets Results in Washington, D.C.

A just-issued U.S. Internal Revenue Service (IRS) decision to set $500 as a newly-allowed Flexible Spending Account (FSA) carryover from one year to the next is a major improvement on the tax agency's shortsighted proposal originally offered in 2012 to completely do away with the so-called "use-it-or-lose-it" rule.

Last year, the IRS quietly and without direction from Congress outlined the agency's plan to entirely eliminate the FSA annual draw-down requirement, even though it ensures that consumers utilize all of their pre-tax funds set aside each year for health care purposes, including primary eye and vision care as well as systemic preventive care through their local doctor of optometry.

On behalf of concerned ODs and their patients across the country, the AOA weighed in forcefully against the IRS's elimination scheme, stating that the proposed change would provide new and substantial incentives for millions of Americans to delay or elude primary and preventive care, which could ultimately result in poorer health outcomes for individual patients and higher overall costs for public and private payers.

"While asymptomatic comprehensive eye exams are important due to the fact that many eye and vision problems have no obvious sign or symptom, periodic comprehensive eye examinations provided by an optometrist also play a leading role in detecting undiagnosed systemic diseases, such as diabetes or hypertension," the AOA said.

"Elimination of the 'use-it-or-lose-it' rule will undoubtedly lead to less primary and preventive eye and vision care and, in turn, higher costs for employers and employees due to missed opportunities for early diagnosis and treatment of a range of conditions, including diabetes and hypertension - the two diseases that are now having the most significant impact on the health of the American public and the bottom line for our nation's businesses," the AOA added.

The AOA got involved early in this battle, fought hard for optometry all the way through, and got results. Instead of the full elimination of the FSA draw-down requirement as the IRS and self-proclaimed consumer activists had intended, the new $500 carryover threshold confirms what the AOA has been saying all along: that the complete elimination of the "use-it-or-lose-it" rule would threaten important primary and preventive care opportunities, including those provided by America's doctors of optometry.   

This is just the latest example of the AOA standing up for patients and the essential care that ODs provide no matter how challenging the issue or how powerful the interests aligned on the other side. Self-proclaimed consumer activists will no doubt continue misrepresenting the issue to government officials and will likely renew their push to bring a complete end to the "use-it-or-lose-it" rule.  If they do, the AOA will not hesitate to fight back and keep quality care and patient need at the center of the debate.        

For more information on this topic or to learn how you can become more involved in federal advocacy, contact Jon Hymes, AOA Washington Office Director, at 1-800-365-2219.