TWO PROPOSED BILLS TO IMPROVE UNREIMBURSED MEDICAL

Two bills (HR 167 and HR 63) have been referred to the Ways & Means Committee that would let participants keep control of unused Unreimbursed Medical (URM) funds. This would eliminate the use-it-or-lose-it rule currently in effect.

HR 167 would allow plans beginning after December 31, 2001, to offer a choice to participants on how they want to handle unused URM funds. Unused funds up to $3,000 could be rolled over tax free and applied to future plan years or distributed to an IRA, 401(k), 403 (b), 457 plan, or distributed to the participant as taxable income.

HR 63 would be effective immediately and allow unused fund to be distributed back to the participant as taxable income. This bill is easy to understand and administer, therefore, many prefer it to HR 167.

As we reported last month, President Bush also favors changes in the current law, which would allow up to $500 in unused funds to be rolled over to the next plan year. It appears with all the current interest in the "use-it-or-lose it" provision of the law that we should see some helpful legislation this year.

Let your Representatives in Washington know that you support new legislation allowing for taxable disbursements or rollovers of unused funds. For your convenience, below is a list of the e-mail addresses for our Mississippi Representatives:

Sen. Thad Cochran - senator@cochran.senate.gov

Sen. Trent Lott - senatorlott@lott.senate.gov

Roger Wicker - roger.wicker@mail.house.gov

Bennie Thompson - thompsonms02@mail.house.gov

Charles Pickering - phone 202-225-2797

Ronnie Shows - ronnie.shows@mail.house.gov

Gene Taylor - gene.taylor@mail.house.gov.

If you prefer to contact your representative by mail, please contact us for the mailing address.

MEMORIAL DAY HOLIDAY

We will be closed May 28, 2001 in observance of Memorial Day.