New Rule: $500 Rollover for Health Care FSA
News from March 24, 2014
If you're a Health Care Flexible Spending Account (FSA) participant, we have good news for you! Effective with the current plan year, you can roll over up to $500 of unused funds in your account to the following plan year.
Thanks to recent guidance from the Internal Revenue Service (IRS), Penn is allowed to relax the normal “use it or lose it” rule. Now, instead of forfeiting all unspent money in your Health Care FSA at the end of the plan year, you’re able to protect up to $500 by rolling it over to the following year.
The $500 rollover rule is effective with the current plan year. That means if you’re currently enrolled in the Health Care FSA (for the plan year ending June 30, 2014), up to $500 of unused expenses will automatically roll over to the 2014-2015 plan year.
Keep in mind that this new rollover rule only applies to the Health Care FSA, which lets you use pre-tax money to pay for qualified healthcare expenses. Participants in the Dependent Care FSA cannot roll over any unused funds.