Human Resource & Labor News
www.agc.orgFebruary 6, 2014 / Issue No. 01-14
AGC Home Page
Email our Editor
Search Back Issues
Forward to a Friend
Subscribe
Printer Friendly
Advertisement
On the Inside
Labor Law
NLRB Re-Proposes "Quickie Election" Rule
NLRB Abandons Notice-Posting Rule
Circuit Court Validates Class Action Waivers in Employment Arbitration Agreements
Wage-Hour Law
Supreme Court Clarifies Meaning of “Changing Clothes” Under The Fair Labor Standards Act
Federal Contracting
OFCCP’s Disability and Veterans Rules Effective March 24, Mandatory Self-ID Form Released
Recording of AGC’s Latest Davis-Bacon Webinar Series Now Available
Labor Department Provides Clarification on Application of Davis-Bacon to Survey Crews
Union Contracting
Updated Inventory of Construction-Industry Multiemployer Pension Plans Released as Advocacy Efforts for Reform Continue
Collective Bargaining in 2013 Yields Average 1st-Year Increase of 2.2 Percent
Construction Union Membership and Members’ Earnings Both Rise in 2013, While Nonunion Workers’ Earnings Decline
HR Practice
Save the Date: 2014 Construction HR and Training Professionals Conference Set for Oct. 15-17 in Phoenix, Arizona
Health FSA Rules Modified to Allow Carryover
Counting the Cost of Payroll Cards: Are They Worth It for Employers?
Construction Firms Plan to Hire in 2014, Worry About Worker Shortages
Advertisement
Advertisement
Advertisement
Health FSA Rules Modified to Allow Carryover
 

The U.S. Department of the Treasury recently issued a notice modifying the longstanding “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. The modification was made in response to comments received pointing to the difficulty of predicting future needs for medical expenditures, the need to make FSAs accessible to employees of all income levels, and the desire to minimize incentives for unnecessary spending at the end of the year.

Until the modification, any account balances remaining unused at the end of the year were forfeited by employees. Under current law, 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. The new rules give employers the option to allow employees to carry over up to $500 of the unused amounts left in their health FSAs for expenses in the next year. 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. For this reason, employers cannot offer a grace period on the same plan year that it offers the carryover provision. So, employers may continue to allow the use of funds for up to two-and-a-half months after the end of the plan year or allow employees to carry over up to $500 of unused funds, but not both. It is ultimately the employer’s choice to provide either option, or no option at all.

The treasury department has posted a Fact Sheet on its website that can be shared with employees.


Return to Top
Advertisement

2300 Wilson Boulevard, Suite 400 • Arlington, VA 22201 • 703.548.3118 (phone) • 703.548.3119 (fax) • www.agc.org
AGC Home | About AGC | Advocacy | Industry Topics | Construction Markets | Programs & Events | Career Development | News & Media

To ensure delivery of AGC’s Human Resource & Labor News, please add 'communications@agc.org' to your email address book or Safe Sender List. If you are still having problems receiving our communications, visit our white-listing page for more details.

© Copyright The Associated General Contractors (AGC) of America. All Rights Reserved.


The Associated General Contractors of America | Quality People. Quality Projects.