Medical FSA Improvement Act of 2011

Mr. President, I come to the floor, as I have just about every week since the health care law has been passed, with a doctor's second opinion about the health care law. I have great concerns about the law that was forced through this Senate.

I come to the floor because it seems that the more Americans find out and learn about this health care law, the less they like it. A majority of Americans now in national polls say they want out. They absolutely want out.

Since October of 2010, the administration has granted waivers-- waivers--to unions, businesses, insurers, and actually to whole States because they cannot afford the health care law's burdensome mandates.

The Secretary of Health and Human Services continues to release more waivers and did so again last Friday. They have now granted a total of 1,471 annual benefit limit waivers, and this has covered 3.2 million Americans.

That is why I come to the floor to introduce a bill that will allow every American--every American--to apply for a waiver from the President's health care law.

Under my bill, any American can submit a waiver application seeking relief from any or all of the health care law's mandates. All those Americans will have to do is simply show what unions and corporations have shown in order to get their waivers--nothing more, nothing less.

Waivers will be granted to individuals who show that the health care law is either increasing their insurance premiums or decreasing their access to benefits. That is all they have to show.

So far, this administration has ignored most Americans demand for a way out of the health care law, and Americans are looking for a way out of it. Instead, this administration has granted half the waivers--half the waivers--to people who get their health coverage through unions. Although those people represent a very small percentage of the workers in America, they got half of all the waivers. It is neither fair nor is it reasonable.

These are the same unions--the same unions--that lobbied for and supported the health care law. But now that they have actually read it and found out what is in it, even though it has been passed--too late now; we thought too late--but they have been getting waivers so they do not have to live under the mandates of the health care law.

We are talking about unions such as the Service Employees International Union. This is what they said about the health care law. These are people who lobbied for the health care law. Now they have found out what is in it, and they say to live under it would be financially impossible. A union that lobbied for the health care law now says it would be financially impossible to live under it.

It does not just apply to that union; it applies to Americans all across this great land. So I do not think any Americans should have to bear financially impossible costs because of the law.

The financially impossible mandates and elements of this bill have absolutely become more obvious to more Americans as they have taken the time to look at the rules and the regulations. That is why, frankly, this steady drip of waivers coming out of Health and Human Services-- giving waivers to many of their friends--has become such an embarrassment for this administration and why they actually recently abruptly changed the rules.

In June, the Centers for Medicare and Medicaid Services announced that all employees and organizations that cannot afford the law's crushing mandates--and there are many--must jump through a new set of hoops. It used to be that they would get a 1-year waiver. Now all employers and organizations, even those that have already gotten a waiver, must apply for long-term waivers by September of this year. The long-term waivers will last all the way until 2014.

Instead of ending the waiver process, the administration should extend the waiver process to include all Americans. That is what my bill does. If not, families, companies, and organizations of all sizes will soon be hit with these crushing mandates.

Under the administration's current plan, employers will be forced to provide $750,000 worth of coverage to every employee this year. By next September, that number balloons to $2 million. Beyond that, there is no limit--it continues to go higher and higher. So if you are an employer and you cannot afford $2 million in coverage next year, well, you better apply for your waiver now, that long-term waiver, before September of this year; otherwise, you are going to be stuck with costs that only get higher and higher. This, to me, is what the administration wants to do because they do not want to put out waivers in 2012, an election year, which is going to cause additional attention to how unpopular this health care law continues to be.

Let's talk about some Americans who get together--people in any community, in my State, in your State, Mr. President--and want to start a new business. They are thinking about starting a new business after September, thinking about, Do we do it this summer? Do we wait until the fall? If these people want to start a new business and hire people and they want to start that business after September, they are going to be faced with two difficult choices: They can offer high-cost, government-approved health insurance--that is what the health care law says--making it very expensive for them to try to open a new business, to try to hire workers, to put America back to work--we are at a time when there is 9.2 percent unemployment in this country--or these people trying to start a new business can refuse to offer coverage at all because they can't afford the health care law's sky-high mandates.

So the incentives in the health care law will encourage businesses to do what? Well, to drop insurance coverage if they are providing it right now. Under the law, businesses are permitted to drop out of paying for employer-provided coverage as long as they pay a fine. The fine is going to be $2,000 per employee. The fine is far smaller than the exploding costs imposed by the health care law. So I think this explains why McKinsey & Company recently reported that up to 50 percent of employers are expected to stop offering employer-provided health care coverage.

The employees who are dumped--what happens to them? Well, they will be forced to get their insurance through a government exchange, an exchange run by Washington, which is heavily subsidized by the American taxpayers. They are going to be dumped into the exchange. The annual cost of subsidizing these ballooning numbers of insurance policies, by my calculation, is about $900 billion. Well, that is nine times higher than what the White House has claimed. In short, the taxpayers of this country will be stuck with a bill of nearly $1 trillion every year.

Well, I am going to continue to come to the floor week after week, continue to fight to repeal and replace this health care law with patient-centered care--patient-centered care--that lowers costs for all Americans and improves their care. So I will continue with the second opinions because until we are able to repeal and replace the health care law, I am going to move forward with what is now the Waive Act. This bill offers all Americans the freedom to choose--the freedom that has been taken away from them by the President's health care law. It gives them the right to seek and be granted a waiver out of the President's health care law. It is time to transfer power from Washington back to the American people. This will ensure they can get the care they need from the doctor they want at a price they can afford.

Mr. President, throughout my career in public service I have focused on ensuring that each and every child with a disability has a right to a good education. To this end, I have fought tirelessly to safeguard the rights of children with disabilities under the Individuals with Disabilities Education Act, IDEA, the landmark legislation that has been improving the educational outcomes of millions of students across the nation since 1975 through the principles of inclusion and equality. When Congress passed IDEA with strong bipartisan support, we understood that our commitment to provide high-quality educational opportunities and serve the needs of students with disabilities in our classrooms entailed excess costs compared to other students, which would have a significant financial impact on States and school districts. As a result, Congress committed to cover up to 40 percent of the excess cost of educating students with disabilities; however, we have failed to deliver on that promise and the law has been greatly underfunded. This is why I am pleased to introduce the IDEA Full Funding Act, with my colleagues Richard Durbin, Frank Lautenberg, Richard Blumenthal, Patty Murray, Sheldon Whitehouse, Patrick Leahy, Michael Bennet, Al Franken, Barbara Mikulski, Jack Reed, Jeanne Shaheen, Tim Johnson, and Mark Begich, which will meet the full Federal commitment at no additional cost to taxpayers. Given the current financial difficulties that many State and local governments are facing, this legislation is more essential than ever for ensuring that students with disabilities get the high-quality education and services they need to fulfill their potential.

Since the enactment of IDEA, students with disabilities across the United States have made tremendous progress. Today, over 6.6 million students receive special education services designed to meet their individual needs. Mr. President, 95 percent of students with disabilities attend a neighborhood school, and almost \2/3\ of those spend at least 80 percent of their day in the regular school environment. Nearly 350,000 infants and toddlers receive early intervention services. Almost 6 out of 10 students with disabilities graduate high school with a regular diploma--twice the percentage of 25 years ago. Moreover, approximately half of students with disabilities enroll in postsecondary education. We must do our best to continue this progress and make good on a 36-year-old promise because we still have a long way to go: students with disabilities who graduate from high school have an employment rate that is less than half the employment rate of the general population.

Today, the Federal Government provides about 16 percent of special education costs or less than half of the committed level of 40 percent. In the current fiscal year, this means that Federal funds are almost $24 billion short, which forces States and school districts to make up the Federal shortfall at a time when they are cash strapped. The IDEA Full Funding Act will fully fund the Federal commitment to IDEA by gradually increasing the Federal Government's share of the excess costs of educating students with disabilities to its committed level over 10 years. Specifically, this legislation will increase the Federal dollars appropriated from $11.5 billion in fiscal year 2011 to $35.3 billion in fiscal year 2021.

By making good on our 36-year-old promise, which has a history of bipartisan support, we will supply schools with the necessary funding to enhance the quality and range of services available to students with disabilities. The funding increase will help to raise salaries for teachers and related services personnel, thereby allowing districts to enhance recruitment and retention possibilities, and will support school districts in increasing graduation rates and postsecondary enrollment rates of students with disabilities.

In these difficult times, it is essential for Congress to provide these revenues without increasing the deficit. The IDEA Full Funding Act is fully paid for by doubling the tax on cigarettes and small cigars and setting equivalent increases to other tobacco products. In addition to the benefit of offsetting the cost of fully funding IDEA, these tax provisions will help an estimated 1 million Americans reduce their tobacco use or quit altogether and prevent an estimated 2.2 million children from taking up smoking in the first place. The stakes are incredibly high: smoking kills more people than alcohol, AIDS, car accidents, illegal drugs, murders, and suicides combined, with thousands more dying from spit tobacco use. Every day at least 1,000 children become new regular, daily smokers in the U.S. and of those, almost a third will ultimately die from it. Furthermore, every year Americans incur the cost of $96 billion in public and private health care expenditures caused by smoking, including an estimated $54.6 billion in Federal Medicare and Medicaid Federal expenditures. Overall, this legislation, which I hope will enjoy bipartisan support, will impact children's lives in important ways, both by improving the educational outcomes of students with disabilities and by improving their health through smoking prevention.

Mr. President, I rise today to introduce the Medical FSA Improvement Act of 2011. I am joined in this effort by Senator Enzi and I thank him for his support. Our bill would allow employees who have medical FSAs to cash out unused amounts, effectively repealing the current ``use-it-or-lose-it'' policy.

Our legislation would modernize and encourage participation in FSAs, which are a helpful tool for health care consumers who face significant cost sharing burdens. It would remove the penalty on employees who act prudently throughout the year and save their FSA dollars.

Flexible spending arrangements are an important benefit for many of my constituents in Maryland, Federal, State, and private sector employees, that allows them to set aside a portion of their income tax- free to pay for out-of-pocket medical expenses, such as co-payments for doctor visits and prescription drugs, medical supplies, and equipment.

Nationwide, about 35 million Americans have FSAs, and the median salary of FSA participants is $55,000. It is estimated that one-third of Federal employees contribute to an FSA. Currently in Maryland, there are over 50,000 Federal employees who benefit from FSAs. These plans are efficient, the administrative costs are between two and three percent of claims, far lower than other health insurance administrative costs, and over 90 percent of claims can be substantiated electronically, meaning that paperwork for participants is minimized.

More than 85 percent of America's large employers offer FSAs, but only about 20 percent of eligible employees enroll. According to several surveys of eligible participants, the primary reason for declining to enroll or for underfunding accounts is concern about the ``use-it-or-lose-it'' rule, which requires participants to spend their entire contribution before the end of the plan year or risk forfeiting the unused funds back to their employer. This ``use-it-or-lose-it'' rule was initially enacted to prevent participants from putting excessive amounts in their FSA, and it served to regulate what used to be an uncapped benefit. With the enactment of the Affordable Care Act in 2010, annual contributions to FSAs will be capped at $2,500 beginning in 2013, which makes the ``use-it-or-lose-it'' rule unnecessary.

It is unreasonable to expect FSA participants, especially those with chronic conditions, to be able to accurately forecast their out-of- pocket medical expenses a year in advance, and it is unfair to penalize them at the end of the plan year if their estimates are incorrect by making them forfeit any unspent amounts. Ending the ``use-it-

or-lose-it'' rule and allowing for this cash-out option is a wise and sensible improvement to FSAs that will encourage more efficient participation in medical flexible spending accounts.

It is time to modernize FSAs to eliminate this burdensome ``use-it- or-lose-it'' rule. It is both fair and sound health policy to allow FSA participants to cash-out remaining funds at the end of the plan year rather than forfeiting the balance to their employer. The amounts cashed out would be taxable for the year of the cash-out. Moreover, just as it is at the discretion of employers to establish FSAs for their employees, it would be the employer's option to offer the cash- out feature. But I believe many employers will offer this option, as they too will save money through increased employer payroll tax savings.

Data provided by WageWorks shows that the average unused balance in the end of the year in an FSA is about $100, and each year a total of nearly $400 million remains in FSA accounts. The static analysis, before considering the effects of greater participation in FSAs, would indicate that allowing a cash-out of these funds and taxing these unused amounts would increase federal revenues by about $70 million a year, holding everything else constant.

Our legislation is supported by the Employers' Council on Flexible Compensation, representing more than 100 member companies, including employers, accounting and consulting firms, third party administrators, and actuarial companies. I am also pleased to announce the support of the National Treasury Employees Union, which represents more than 150,000 Federal employees in 31 agencies.

I commend Representatives Charles Boustany and John Larson for having introduced a bipartisan companion bill in the House of Representatives, and urge my colleagues to support this common-sense measure.

Mr. President, I rise today to introduce the Medical FSA Improvement Act of 2011. I am joined in this effort by Senator Enzi and I thank him for his support. Our bill would allow employees who have medical FSAs to cash out unused amounts, effectively repealing the current ``use-it-or-lose-it'' policy.

Our legislation would modernize and encourage participation in FSAs, which are a helpful tool for health care consumers who face significant cost sharing burdens. It would remove the penalty on employees who act prudently throughout the year and save their FSA dollars.

Flexible spending arrangements are an important benefit for many of my constituents in Maryland, Federal, State, and private sector employees, that allows them to set aside a portion of their income tax- free to pay for out-of-pocket medical expenses, such as co-payments for doctor visits and prescription drugs, medical supplies, and equipment.

Nationwide, about 35 million Americans have FSAs, and the median salary of FSA participants is $55,000. It is estimated that one-third of Federal employees contribute to an FSA. Currently in Maryland, there are over 50,000 Federal employees who benefit from FSAs. These plans are efficient, the administrative costs are between two and three percent of claims, far lower than other health insurance administrative costs, and over 90 percent of claims can be substantiated electronically, meaning that paperwork for participants is minimized.

More than 85 percent of America's large employers offer FSAs, but only about 20 percent of eligible employees enroll. According to several surveys of eligible participants, the primary reason for declining to enroll or for underfunding accounts is concern about the ``use-it-or-lose-it'' rule, which requires participants to spend their entire contribution before the end of the plan year or risk forfeiting the unused funds back to their employer. This ``use-it-or-lose-it'' rule was initially enacted to prevent participants from putting excessive amounts in their FSA, and it served to regulate what used to be an uncapped benefit. With the enactment of the Affordable Care Act in 2010, annual contributions to FSAs will be capped at $2,500 beginning in 2013, which makes the ``use-it-or-lose-it'' rule unnecessary.

It is unreasonable to expect FSA participants, especially those with chronic conditions, to be able to accurately forecast their out-of- pocket medical expenses a year in advance, and it is unfair to penalize them at the end of the plan year if their estimates are incorrect by making them forfeit any unspent amounts. Ending the ``use-it-

or-lose-it'' rule and allowing for this cash-out option is a wise and sensible improvement to FSAs that will encourage more efficient participation in medical flexible spending accounts.

It is time to modernize FSAs to eliminate this burdensome ``use-it- or-lose-it'' rule. It is both fair and sound health policy to allow FSA participants to cash-out remaining funds at the end of the plan year rather than forfeiting the balance to their employer. The amounts cashed out would be taxable for the year of the cash-out. Moreover, just as it is at the discretion of employers to establish FSAs for their employees, it would be the employer's option to offer the cash- out feature. But I believe many employers will offer this option, as they too will save money through increased employer payroll tax savings.

Data provided by WageWorks shows that the average unused balance in the end of the year in an FSA is about $100, and each year a total of nearly $400 million remains in FSA accounts. The static analysis, before considering the effects of greater participation in FSAs, would indicate that allowing a cash-out of these funds and taxing these unused amounts would increase federal revenues by about $70 million a year, holding everything else constant.

Our legislation is supported by the Employers' Council on Flexible Compensation, representing more than 100 member companies, including employers, accounting and consulting firms, third party administrators, and actuarial companies. I am also pleased to announce the support of the National Treasury Employees Union, which represents more than 150,000 Federal employees in 31 agencies.

I commend Representatives Charles Boustany and John Larson for having introduced a bipartisan companion bill in the House of Representatives, and urge my colleagues to support this common-sense measure.

Mr. President, today I am introducing a private relief bill on behalf of Guy Privat Tape and Lou Nazie Raymonde Toto. Mr. Tape and Ms. Toto are citizens of the Ivory Coast, but have been living in the San Francisco area of California for approximately 17 years.

The story of Mr. Tape and Ms. Toto is compelling and I believe they merit Congress' special consideration for such an extraordinary form of relief as a private bill.

Mr. Tape and Ms. Toto were subjected to numerous atrocities in the early 1990's in the Ivory Coast. After participating in a demonstration against the ruling party, they were jailed and tortured by their own government. Ms. Toto was brutally raped by her captors and several years later learned that she had contracted HIV.

Despite the hardships that they suffered, Mr. Tape and Ms. Toto were able to make a better life for themselves in the United States. Mr. Tape arrived in the U.S in 1993 on a B1/B2 non-immigrant visa. Ms. Toto entered without inspection in 1995 from Spain. Despite being diagnosed with HIV, Ms. Toto gave birth to two healthy children, Melody, age 13, and Emmanuel, age 8.

Since arriving in the United States, this family has dedicated themselves to community involvement and a strong work ethic. They are active members of Easter Hill United Methodist Church.

Mr. Tape is employed as a security guard and unfortunately, in 2002, he was diagnosed with prostate cancer. While his doctor states that the cancer is currently in remission, he will continue to require life-long surveillance to monitor for recurrence of the disease.

In addition to raising her two children, Ms. Toto obtained a certificate to be a nurse's aide and currently works as a Resident Care Specialist at a nursing home in San Pablo, California. Ms. Toto continues to receive medical treatment for HIV. According to her doctor, without access to adequate health care and laboratory monitoring, she is at risk of developing life-threatening illnesses.

Mr. Tape and Ms. Toto applied for asylum when they arrived in the U.S., but after many years of litigation, the claim was ultimately denied by the 9th Circuit Court of Appeals.

Although the regime which subjected Mr. Tape and Ms. Toto to imprisonment and torture is no longer in power, Mr. Tape has been afraid to return to the Ivory Coast due to his prior association with former President Laurent Gbagbo. As a result, Mr. Tape strongly believes that his family will be targeted if they return to the Ivory Coast.

One of the most compelling reasons for permitting the family to remain in the United States is the impact their deportation would have on their two U.S. citizen children. For Melody and Emmanuel, the United States is the only country they have ever known. Mr. Tape believes that if the family returns to the Ivory Coast, these two young children will be forced to enter the army.

This bill is the only hope for this family to remain in the United States. To send them back to the Ivory Coast, where they may face persecution and inadequate medical treatment for their illnesses would be devastating to the family. I have received approximately 30 letters from the church community in support of this family.

I ask my colleagues to support this private bill.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.