In October 2013, the Treasury and the IRS modified the forfeiture (“use-or-lose”) rule for health care flexible spending accounts (FSAs). FSA programs may now allow their participants to carry over up to $500 of unused health care FSA funds to the next plan year OR allow enrollees up to a 2-1/2 month grace period at the end of the plan year to use the funds in their flexible spending accounts. Employers also have the option of offering neither.
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