Use it or lose it? Hardly. This year, it's easier to make sure those pretax contributions to health care flexible spending accounts aren't lost.
It used to be that any FSA funds left at the end of a plan year were forfeited, but last fall, the Internal Revenue Service modified the rules. Now, employers can offer workers a carryover of up to $500 of unused balances at the end of the plan year, or give them a 2½-month grace period in the next year to spend that money. Check to see if your plan is among those offering a reprieve.
Benefits administrator WageWorks, which works with 45,000 companies covering 3.8 million employees, reports 1,200 of its employers had a carry-over provision in place for 2014. Tallies haven't been finalized yet this year, but they expect a percentage increase in the "mid to high teens." "The $500 carryover virtually eliminates the risk of losing any leftover balance, while helping people save money on their health-care expenses from day one," said chief executive Joe Jackson.