Obamacare Forcing End of Health Savings Accounts


Every time you blink or turn around, the Affordable Care Act takes another step to hurt individuals, families and businesses. This time Obamacare is determined to see the annihilation of Flexible and Health Savings Accounts.

Currently, millions of Americans have a specific amount or percentage of their wages deducted prior to taxes and placed in a tax free FSA or HSA. Those funds are then used to pay out of pocket medical expenses not covered by their health plans. In the course of a year, these accounts can save an individual or family hundreds of dollars in taxes.

However, the greedy tax-sucking Obama administration can’t stand to see any American save money, especially tax money. If they had their way, we would all be paying twice the taxes we currently pay and possibly more.

That’s why the architects of America’s national socialized healthcare system inserted a provision in the thousands of pages of the Affordable Care Act referred by many as the Cadillac tax. Starting in 2018, the Cadillac tax takes effect. In reality, it’s an excise tax aimed at employers who provide healthcare plans costing $10,200 or more for an individual or $27,500 for a family plan. All costs above those limits will be subject to a 40% excise tax paid for by the employer.

Many of you will think that this won’t affect you, but think again. You may only be paying $3,000 to $5,000 a year for your medical coverage but chances are your employer is paying a lot more on your behalf. One analyst thinks that the Cadillac tax will affect one out of every four employers in the nation.

So how will this affect your FSA or HSA? The amount of pre-taxed income that goes into one of these accounts is considered part of the employer expense for your health plan. Consequently, many employers will look for ways to cut their healthcare expenses and one of the ways they can do this is eliminate employee FSA and HSA programs.

Ed Haislmaier, a Senior Research Fellow in the Heritage Foundation’s Health Policy Studies group explained:

“It is true, in theory, based on the way the Cadillac tax works.”

“I mean, this is technically a tax on high-cost employer health plans.”

When asked if there is anything an employee can do, he responded:

“Not really. That’s the problem because the way this is designed is it imposes a penalty on the employer. So the onus is on the employer to cut back the generosity, if you will, of the total package of benefits.”

Obamacare has already imposed penalties on employers for not offering healthcare coverage to full time employees. Now they are going to be penalized for providing too much care for their employees. Excuse my language but it sounds like a damned if you don’t and damned if you do system.

This is one of hundreds of reasons why I still believe that Obamacare has absolutely nothing to do with improving healthcare in the United States. The sole purpose is to impose a socialist policy on every American and force them into compliance or else. It also forces Americans to rely more heavily on the federal government for their needs, which is also the socialist way of running a country. Why else would all of the socialists, also known as Democrats, be so in favor of such a program and why all of those who actually have some loyalty to America are so adamantly against it.

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