WSRQ Sarasota Talk Radio Nilon Report featuring Rick Ratner

The Nilon Report featured Rick Ratner, Denise Kowal, Nick Joshi, and Kathryn Moroney on November 14th, 2013 who discussed the Nov. 19th free seminar about changes in employment law, hosted by The Employment Management Team.    Click to hear podcast. 

Treasury modify health flexible spending arrangements 'use-or-lose' rules

The U.S. Department of the Treasury and the IRS have issued a notice modifying the “use-or-lose” rule for health flexible spending arrangements (FSAs). The updated guidance permits employers to allow plan participants to carry over up to $500 of their unused health FSA balances remaining at the end of a plan year.

Under current law, employees eligible for health FSAs have been subject to the use-or-lose rule, meaning that any account balances remaining unused at the end of the year are forfeited. Plan sponsors have the option of allowing employees a grace period permitting them to use amounts remaining unused at the end of a year to pay qualified FSA expenses incurred for up to two and a half months following year-end.

Changes
The new guidance permits employers to now allow employees to carry over up to $500 of the unused amounts left in their health FSAs for expenses in the next year. Some plan sponsors may be eligible to take advantage of the option to adopt a carryover provision as early as plan year 2013.

In addition, the existing option for plan sponsors to allow employees a grace period after the end of the plan year remains in place. However, a health FSA cannot have both a carryover and a grace period: it can have one or the other or neither.

Source: www.treasury.gov