Flexible spending accounts (FSAs) are employer-sponsored plans that allow employees to set aside money, tax-free, for health expenses. Depending upon the plan, employees can either roll over as much as $500 from their accounts into the next year, or they are given an extra two-and-a-half months (through March 15) to use the excess funds.
For employers, informing their employees of carryover / grace period rules is a nice idea as 2016 begins. It can go a long way in helping employees best address health care costs. After all, no one wants to set money aside only to have that money disappear.
For employees, it’s imperative to be aware of your HSA rules. For those with a grace period to spend excess funds, there’s little time to waste in the first quarter of 2016. For users with rollover funds, the first quarter offers a chance to budget for the year ahead.
Another way that can help employees use their money in their account is FSAStore.com, which is dedicated to FSA eligible products and services. In most cases, the products or services carried on this site will be covered by an employee’s FSA plan.
Talk to a Plexus Groupe client service representative to find out more about Flexible Spending Accounts by calling us at 847.307.6100 (Chicago) or 972-770-5010 (Dallas / Oklahoma City), or contact us via the Web at plexusgroupe.com.
Notice 2013-71: Modification of “Use-or-Lose” Rule For Health Flexible Spending Arrangements (FSAs) and Clarification Regarding 2013-2014 Non-Calendar Year Salary Reduction Elections Under § 125 Cafeteria Plans. Department of Treasury, Internal Revenue Service.
“Frequently Asked Questions,” FSAStore.com.
“Using a Flexible Spending Account (FSA).” Healthcare.gov.
Mayer, Kathryn. “FSA use-it-or-lose-it rule changed.” Benefitspro.com, December 1, 2013.