Modification to Flexible Spending Account “Use It or Lose It” Rule

The government announced on October 31, 2013 in Notice 2013-71 that employers may allow employees with health flexible spending accounts (FSAs) to carry over up to $500 of unused funds to the following plan year. This is a change from prior regulations that required employees to use all of their FSA funds during the current plan year or forfeit the funds remaining in their accounts at the end of the year. This is commonly referred to as the “use it or lose it” rule.

Read more: Client Alert–Modification to Flexible Spending November 1, 2013