This month, Congressmen Charles Boustany (R-La.) and John Larson (D-Conn.) introduced the Medical Flexible Spending Account Improvement Act, a bill that would allow consumers to withdraw and pay taxes on any remaining funds in their medical FSAs instead of forcing them to forfeit the remaining balance to their employer as the current rules require.

H.R. 1004 aims to encourage more people to use FSAs and provides relief to the estimated one-quarter of FSA holders who must forfeit funds each year. Under this proposal, any funds not used to pay for medical expenses during the plan year can be withdrawn by the account holder, who would then pay tax on the amount.

Click here to read H.R. 1004.