Legislation would give troops flexible spending accounts

Military service members would be able to sock away money for health care and other expenses in flexible savings accounts under a bipartisan bill House and Senate lawmakers unveiled on Thursday.

Currently, civilian federal employees can use flexible spending accounts, which allow them to set aside a portion of their income before taxes, to cover out-of-pocket expenses such as health co-payments, and dental and eye care. "Civilians have enjoyed the FSA perks for a while now," said Pamela Stokes Eggleston, development director at Blue Star Families, a nonprofit organization created by and for military families, on Thursday. "It is sound business to ensure that our service members and their families have the same opportunity."

California Democrats Rep. Loretta Sanchez and Sen. Barbara Boxer introduced the bill, with support from Republican Sen. Richard Burr, N.C., and GOP Reps. Virginia Foxx, N.C., and Cathy McMorris Rodgers, Wash. "This is a simple matter of fairness," Sanchez said. "Flexible spending accounts will help our military families save on health care and child expenses like other federal employees."

The Office of Personnel Management authorized FSAs for the federal workforce in 2003, and the 2010 health care reform law expanded reimbursement for children's expenses through flexible spending accounts. The legislation would allow service members to use their accounts for child care costs.

Flexible spending accounts could become more important this year, as federal employees are experiencing an increase in the cost of vision and dental coverage on top of a jump in health insurance premiums. According to OPM, premiums for dental insurance rose 3.8 percent compared to 2010 and will average $15.33 per pay period for an individual, $30.06 for self plus one and $43.85 for family plans. Vision insurance went up 3 percent, costing individuals an average of $4.78 per pay period, self plus one enrollees $9.55 and family users $14.11. Dental premiums increased 4.2 percent and vision 2.4 percent in 2010. Feds can set aside up to $5,000 annually for FSAs.

President Obama's fiscal 2012 budget request proposes a 1.6 percent pay raise for military personnel and allocates an overall $8.3 billion for education, housing and other quality-of-life programs for service members. The $8.3 billion includes $1.2 billion to expand affordable child care for military families, $4.7 billion to improve service members' quality of life, and $2.4 billion to maintain and build Defense Department schools. Quality-of-life objectives can cover a range of programs, including access to health care, spouse employment opportunities, financial education assistance, and health and wellness initiatives.