30 Second Insurance Tips©

Tip 143- Treasury Adds ‘Flex’ To Section 125

On October 31, the Department of Treasury (DOT) announced a major policy change that impacts Flexible Spending Accounts (FSAs). Specifically, the DOT has modified its Medical FSA “Use It or Lose It” provision to allow a carryover of FSA funds – up to $500 – from one Plan Year to the next.

The new Carryover provision is good news for employers and for their employees, who should appreciate being able to carryover fund balances. Look for a boost in employee participation and a rise in annual FSA contribution levels because there is little to no employee risk of forfeiting hard earned funds at Plan Year end.