FSA Carry Over Rules for Unused Balances: Did They Change?
Posted on December 01, 2013
Q: Are the flexible spending account (FSA) rules for carrying over unused balances changing?
A: You may have heard the recent federal announcement about FSA participants being able to carry over $500 of their unused balance to use the following year. The caveat is that employers can allow the $500 carryover, OR the two-and-a-half-month grace period, but not both. Because the optional grace period has no maximum balance amount, ESG clients will see no changes to the current plan design. The grace period allows participants to spend their entire unused balanced for services received through March 15th of the following plan year, rather than only being able to carry over a maximum balance of $500.
If you have any questions about this, please contact us.