Health Flexible Spending Account (FSA) contributions
left over at the end of a plan year are forfeited
to the employer under the "use-it-or-lose-it rule,"
although a plan can provide a grace period extending
the period for incurring expenses for qualified
benefits to the 15th day of the third month
after the end of the plan year (i.e., March
15th for a calendar-year plan). However, the
IRS will allow employers, for the first time,
to amend their Section 125 cafeteria plan
to allow up to $500 of unused amounts
remaining at the end of a plan year to be
paid or reimbursed to plan participants for
qualified medical expenses incurred during the
following plan year, provided the plan does not
also have the grace period rule.
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opinions on specific facts or matters, and, accordingly, assume no liability
whatsoever in connection with its use. The information contained in this newsletter
was not intended or written to be used and cannot be used for the purpose of (1)
avoiding tax-related penalties prescribed by the Internal Revenue Code or (2)
promoting or marketing any tax-related matter addressed herein. © 2014