Treasury Eases 'Use-Or-Lose' Rule In Flexible Spending Plans

Law360, New York (November 1, 2013, 3:08 PM EDT) -- The U.S. Department of Treasury and Internal Revenue Service on Thursday relaxed the long-standing "use-or-lose" rule on tax-advantaged health flexible spending arrangements to now allow employee plan participants to carry over up to $500 of remaining funds into the following year.

Under the old rule, which had been in effect for nearly 30 years, any money remaining in an employee's flexible spending arrangement, or FSA, account at the end of the plan year was forfeited. Policymakers have argued the use-or-lose rule is unfair to low and...
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