Lehigh’s Flexible Spending Account (FSA) administrator,Ceridian, was recently acquired by the firm WageWorks. Employees with Dependent Care FSAs or Healthcare FSAs will receive more information on this transition in the near future.
A new federal regulation approved very recently modifies the “use or lose” rules governing Healthcare Flexible Spending Accounts.
In the past, if you had a Healthcare FSA and didn’t spend all of the money you set aside during the plan year, you would forfeit the balance. Starting with the 2013 plan year, Healthcare FSA enrollees may now carry over up to $500 into the new plan year. (The use or lose rule has not changed for Dependent Care FSAs)
Less risk
With the new rule, up to $500 of your unused healthcare FSA balance can be carried over into the next plan year instead of losing it - making enrollment in an FSA much less risky. This gives you more flexibility to spend your FSA money when you need it. You can use it for necessary out-of-pocket healthcare expenses, rather than feeling pressured to engage in last minute and potentially unnecessary spending at the end of the year.
Less worry
Healthcare FSA account holders won’t have to worry about precisely predicting out-of-pocket medical expenses a whole year in advance. The new carryover feature assures that any unused balance of up to $500 will still be there for you in the next plan year.
More flexibility
Healthcare FSAs offer a great way to save on out-of-pocket expenses. By using pre-tax dollars, you will save an average of 30% when you pay for office visits, prescription drugs, contact lenses, and more with Healthcare FSA dollars. With the new carryover feature, you have even more flexibility to plan larger healthcare purchases over a longer period.
Open Enrollment for 2014 flexible benefits has ended, and with it, so too has the chance to open a Healthcare FSA for 2014. The new regulation will continue indefinitely, however. So if the use it or lose it condition has dissuaded you from enrolling in the past, be sure to keep the new rule in mind when selecting your flexible benefits for 2015.
Current Healthcare FSA account holders can contact the benefits team by calling extension 83900 or emailing inben@lehigh.edu to find out how their own situation may be impacted.