NU Online News Service, May 13, 2004, 1:32 p.m. EDT, Washington – The U.S. House of Representatives wants to free some of the cash stranded in cafeteria plans and flexible spending accounts.[@@]

The House has voted 273-152 to approve H.R. 4279, a bill that would let employees contribute up to $500 in unused funds in cafeteria plans and FSAs to health savings accounts.

Under the bill, shifting funds to HSAs from cafeteria plans and FSAs would not affect the tax-exempt status of the cafeteria plans or the FSAs.

The House also voted 229-197 to approve H.R. 4280, which is the latest attempt to pursue medical liability reform.

H.R. 4280 would place a $250,000 cap on compensation for noneconomic damages, such as pain and suffering, that result from medical malpractice.

In addition, the bill would limit punitive damages to $250,000 or 2 times the amount of compensatory damages, whichever were greater.

Karen Ignagni, president of America’s Health Insurance Plans, Washington, has praised the House for acting on medical liability reform and expansion of HSAs.

In particular, she says, a recent survey sponsored by AHIP found that medical liability is becoming a significant issue for voters.

Ignagni says the survey results suggest that voters will consider the issue of medical liability when they head to the polls this November.

Indeed, she says, 72% of those who said they will vote in November reported that they are more likely to vote for a candidate who supports capping noneconomic damages in medical lawsuits.

“This issue is really starting to resonate at the grassroots because voters are increasingly making the connection between frivolous lawsuits and rising costs,” Ignagni says.

In addition to the caps on punitive and noneconomic damages, H.R. 4280 places limits on contingency fees earned by plaintiffs’ lawyers, bans punitive damages in cases involving manufacturers and distributors of medical devices that comply with standards issued by the Food and Drug Administration, and establishes a statute of limitations for the filing of medical liability claims.