If you didn’t have enough time to do what was necessary to allow workers to roll over their FSA funds right away, you’re not alone.
As employers are well aware, the IRS recently announced that FSA account-holders will now be able to carry $500 in unused funds over to the next plan year, effective for 2013 into 2014.
The feds made it a point to let plans know that the FSA carryover is an alternative to the “grace period” – the two-and-half months following the plan year where leftover FSA funds can still be used.
Therefore, both options may not be offered during the same plan year.
Recently, Alegeus Technologies, a healthcare and benefit payment firm, surveyed FSA administrators to see how firms would react to the change.
The ‘more compelling’ option
Here are some of the highlights:
- Nearly half (47%) of FSA administrators said less than a quarter of plans will amend FSAs to allow 2013 rollovers
- 80% said the FSA rollover is a more compelling option than the grace period, and
- Most (55%) said at least half of FSAs will allow rollovers in 2014.