Healthcare

Contact: Brydon M. Dewitt; Williams Mullen (North Carolina & Virgina, USA) 

New federal guidance makes health flexible spending arrangement (FSA) participation more attractive to employees.  IRS Notice 2013-17 provides a new exception to the FSA "use it or lose it rule."

The Use it or Lose It Rule. Under the "use it or lose it rule," amounts contributed to an FSA for a plan year may not be used to reimburse health care expenses incurred in a later plan year.  Any amount remaining in a participant's account at the end of the year is forfeited.  The risk of losing money in the account has discouraged employees from participating in FSAs.

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