President Obama will deliver a Mother’s Day-pegged speech from the White House where he will trombone the supposed benefits of Obamacare for women. The President will undoubtedly forget to mention the 20 new or higher taxes in Obamacare, and the five that most hurt women:
1. Obamacare Flexible Spending Account Tax: The 30-35 million Americans who use a pre-tax Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs face a new Obamacare cap of $2,500. This will squeeze $13 billion of tax money from Americans over the next ten years. (Before Obamacare, the accounts were unlimited under federal law, though employers were allowed to set a cap.) Now, a mother looking to sock away extra money to pay for braces will find herself quickly hitting this new cap, meaning she would have to pony up some or all of the cost with after-tax dollars.
Needless to say, this tax will especially impact middle class families.
There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. Nationwide there are several million families with special needs children and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. This Obamacare tax provision will limit the options available to these families.