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Washington, D.C.—A decision by the Office of Personnel Management (OPM) to increase to $4,000 per year the amount federal employees may set aside as part of their health care Flexible Spending Accounts (FSAs), was supported today by National Treasury Employees Union (NTEU) President Colleen M. Kelley.

The move by the government’s personnel agency came on the heels of a recent ruling by the Internal Revenue Service to allow participants to use the pre-tax money in their accounts to pay for non-prescription medicines. Until that decision, drug reimbursement was limited to the purchase of prescription drugs. The additional FSA monies that employees can choose to put in their health care FSA can be used for over-the-counter medications or other health-related services.

NTEU has long been a strong advocate of providing FSAs, widely available in the private sector, to federal employees.

“This decision will allow federal employees to reap even more benefit from the FSA program,” President Kelley said. “Each year federal employees, like all Americans, spend a fair amount of money on out-of-pocket medical expenses. This increase will allow FSA enrollees to enjoy additional savings from the program.”

FSAs permit employees to set aside money from their paychecks before it is taxed to pay for out-of-pocket medical and dependent care expenses. Annual savings could reach into the thousands of dollars, depending on an employee’s tax bracket and the amount of money set aside.

At the same time OPM announced the increase in the health care FSA, the agency also announced that it would extend by one week the annual open season for the program, currently underway. This extension, to Dec. 15, will give potential participants more time to calculate how much money they wish to set aside for their health care FSAs. OPM also announced plans to contact all federal employees who have already signed up for the program to give them a chance to adjust their FSA accounts in recognition of this change.

While strongly supporting the FSA program, President Kelley has also encouraged federal employees to carefully consider the amount of money they set aside in their FSA accounts. Any money not used at the end of the program year is forfeited.

At a recent press briefing President Kelley was joined by OPM Director Kay Coles James in marking the start of the first full-year open season for the FSA program. At that time the union leader applauded OPM and Director James for their leadership in making the program a reality for federal workers.

“Today’s decision is just another indication that OPM shares NTEU’s strong support in making this the best program possible for federal employees,” Kelley said. “I believe it will be an important tool in the government’s continuing efforts to recruit and retain the high-quality employees that are so critical to the delivery of services to the American people.”

As the largest independent federal union, NTEU represents some 150,000 employees in 29 agencies and departments.