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IRS Issues Guidance Explaining 2011 Changes to Flexible Spending Arrangements

The Internal Revenue Service today issued guidance reflecting statutory changes regarding the use of certain tax-favored arrangements, such as flexible spending arrangements (FSAs), to pay for over-the-counter medicines and drugs.

The Affordable Care Act, enacted in March, established a new uniform standard that, effective Jan. 1, 2011, applies to FSAs and health reimbursement arrangements (HRAs). Under the new standard, the cost of an over-the-counter medicine or drug cannot be reimbursed from the account unless a prescription is obtained. The change does not affect insulin, even if purchased without a prescription, or other health care expenses such as medical devices, eye glasses, contact lenses, co-pays and deductibles. The new standard applies only to purchases made on or after Jan. 1, 2011, so claims for medicines or drugs purchased without a prescription in 2010 can still be reimbursed in 2011, if allowed by the employer’s plan.

A similar rule goes into effect on Jan. 1, 2011 for Health Savings Accounts (HSAs), and Archer Medical Savings Accounts (Archer MSAs).

Employers and employees should take these changes into account as they make health benefit decisions for 2011.

The question is now focused on whether or not Congress has the power to regulate and place a penalty tax on a citizen's decision not to participate in interstate commerce.

A federal judge ruled today that Virginia does indeed have standing to bring its lawsuit seeking to invalidate the federal Patient Protection and Affordable Care Act. The judge also ruled that Virginia had stated a legally sufficient claim in its complaint. In doing so, federal district court judge Henry E. Hudson denied the federal government's motion to dismiss the commonwealth's suit.

"We are pleased that Judge Hudson agreed that Virginia has the standing to move forward with our suit and that our complaint alleged a valid claim," said Attorney General Ken Cuccinelli. Cuccinelli and his legal team had their first opportunity in court on July 1, arguing that Virginia's lawsuit was a valid challenge of the federal health care act and that the court should not dismiss the case as the federal government had requested.

The U.S. Department of Justice argued that Virginia lacked the standing to bring a suit, that the suit is premature, and that the federal government had the power under the U.S. Constitution to mandate that citizens must be covered by government-approved health insurance or pay a monetary penalty.

In denying the motion to dismiss, Judge Hudson found that Virginia had alleged a legally recognized injury to its sovereignty, given the government's assertion that the federal law invalidates a Virginia law, the Health Care Freedom Act. In addressing the issue of Virginia's statute, the Court recognized that the "mere existence of the lawfully-enacted [Virginia] statute is sufficient to trigger the duty of the Attorney General of Virginia to defend the law and the associated sovereign power to enact it." He also found that even though the federal insurance mandate doesn't take effect until 2014, the case is "ripe" because a conflict of the laws is certain to occur.

"This lawsuit is not about health care, it's about our freedom and about standing up and calling on the federal government to follow the ultimate law of the land – the Constitution," Cuccinelli said. "The government cannot draft an unwilling citizen into commerce just so it can regulate him under the Commerce Clause."

The Court recognized that the federal health care law and its associated penalty were literally unprecedented. Specifically, the Court wrote that "[n]o reported case from any federal appellate court has extended the Commerce Clause or Tax Clause to include the regulation of a person's decision not to purchase a product, notwithstanding its effect on interstate commerce."

A summary judgment hearing is scheduled for October 18, 2010, at 9:00 a.m. to decide if the federal health care law is unconstitutional.

The case is Commonwealth of Virginia v. Kathleen Sebelius in the U.S. District Court for the Eastern District of Virginia, in Richmond.

 VA-Health-Care-Ruling.pdf (1.2MB)
Number of downloads: 8

It's been less than four months since President Obama signed the Affordable Care Act -- and, because of reform, about 1 million uninsured Americans are expected to receive coverage by next year. And that's just the start.

A new bill of rights for patients is starting to take effect, and the worst abuses of the insurance industry are coming to an end. As the President recently announced, the Patient's Bill of Rights will ban rescission of coverage, stop discrimination against children with pre-existing conditions, and place restrictions on annual limits.

There are those who still aren't sure about health reform, but as the law takes effect, we have a new opportunity to convince the skeptics. OFA supporters are the very best communicators and organizers in communities all across the county -- you can bring the debate out of D.C. and into your town, and this information sheet is a great tool we believe will help.

The Affordable Care Act works to put consumers back in charge of their health coverage and care. And because of the Patient's Bill of Rights, Americans can know that their insurance will be there when they need it most.

The more information sheets we put in visible places, the stronger the message we'll send about our support for health reform and President Obama. Share it with your friends. Mail it to your family members. If you're a medical professional, post it in your office or waiting room. Be creative -- anything you do will be a huge help in making sure Americans understand what the new law does for them.

Will you help us make the case for change? Download your information sheet and share the Patient's Bill of Rights with five friends today:

http://my.barackobam...ntsbillofrights

How will public assistance programs such as Husky, Medicaid and Medicare be reformed with the passage of this bill?

Will these health care programs be expanded to cover individuals who fall in between the cracks of public and private insurance?

While technology has made it easier to search for plane tickets or to find the right apartment, shopping for private health insurance plans has remained difficult for too long. HealthCare.gov takes some of the mystery out of shopping for health insurance.

Just answer a few easy questions, and HealthCare.gov will provide all the coverage options that are right for you, including public and private health insurance tailored to your age, location, and health needs. The site also helps Americans make informed decisions about health care coverage by offering easy to understand information about new benefits and protections for individuals, families and employers.

The site is easy to use and comprehensive, and it’s only going to get better. Throughout the site, there are places to ask questions and give feedback, and the team at the Department of Health and Human Services will be responding to common questions and updating content based on your feedback. In October, the site will include information on the price of health insurance plans and we’ll be adding other new features like tools to help you stay healthy and a database of hospital quality ratings.

The launch of HealthCare.gov is just one of many steps we have taken to strengthen the health care system for all Americans since President Obama signed the Affordable Care Act into law. Here are a few others:

* Parents can now rest a little easier knowing that insurance companies will be prohibited from denying children coverage because of a preexisting condition or putting a cap on the amount of benefits that will be paid in lifetime;

* Young adults up to age 26 without insurance will be able to get on their parent’s plan;

* Seniors hitting a gap in Medicare prescription drug coverage known as the “donut hole” are getting $250 checks; and

* Small businesses are now eligible for tax credits to help them afford coverage for employees.

But there is much more to be done. Be sure to check out HealthCare.gov regularly to stay current about benefits available to you and informed about what’s ahead.

I think the repukes are getting a little worried about votes this coming election. Yesterday they voted to rescind the 21% cut to Medicare doctors.

Why does the "health care affordability bill" add another layer of cost to small businesses by burdening them with the impossible task of identifying every credit card merchant that they use, getting W9 information and sending them 1099s? What does doing the IRS's dirty work have to do with Health Care?

The American people have rejected the president's government takeover of health care but Washington Democrats are not listening. This afternoon Democrats rejected a motion by House Republicans to repeal one of the most onerous elements of ObamaCare: the individual mandate that will tax and penalize Americans who do not buy government-approved health insurance.

Republican Study Committee Chairman Tom Price (R-GA) issued the following statement highlighting a report by the Government Accountability Office (GAO) which reveals that six organizations involved in the abortion industry received about $1 billion in federal funding from 2002 through 2009. Click here to access the report.

"Regardless of where they stand on abortion, most Americans agree it should not be funded by taxpayer subsidies,” said Chairman Price. “Yet this report shows a horrifying amount of federal funding going to the abortion industry. Money is fungible. Giving abortion providers $1 billion for other activities just frees up an equal sum of money to support their abortion practices. U.S. affiliates of Planned Parenthood received $657 million over seven years while conducting more than 300,000 abortions in 2007 alone. In that same year, they reported a mere 4,912 adoption referrals. It’s time to end this sickening taxpayer subsidy of abortions.”


Summary of GAO Report

Selected Organizations Receiving Government Funding:

* Advocates for Youth: $8.7 Million (total from 2002-2009)
* Guttmacher Institute: $12.7 Million (total from 2002-2008)
* International Planned Parenthood Federation: $93.8 million (total from 2002-2009)
* Planned Parenthood Federation of America : $657.1 million (total from 2002-2008)
* Population Council of the United States: $284.3 million (total from 2002-2008)
* Sexuality Information and Education Council of the United States: $1.6 million (total from 2002-2009)


Funding for Elective Abortion:

* Hyde and Helms: Funding reflected in this report is covered by limitation of funds policies known as the Hyde and Helms Amendments. These two policies are attached to annual appropriations bills and ensure that funds are not used directly for elective abortion. However, by funding the organizations we expand their facilities and influence, and give the taxpayers’ stamp of approval on their abortion agenda.