New York, NY (PRWEB) February 20, 2014
A health FSA may provide for up to $500 of a participant’s unused balance to carry over and be used to reimburse healthcare expenses incurred at any time during that next plan year, according to newly released IRS guidance.
But a health FSA cannot have a carryover and a grace period, even though an employer may want to provide both. Employers are facing some complex trade-offs because of this rule, and will need to determine whether a grace period, a carryover, or neither is best for the organization. Employers who have or who are implementing health savings account-based plans will have particularly complex trade-offs to consider.
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