WageWorks (NYSE: WAGE), a leader in administering Consumer-Directed Benefits, applauds the Department of the Treasury for its decision today to announce a very positive change to the “Use It or Lose It” rule, which required any leftover balance in a Flexible Spending Account (FSA) to be forfeited at the end of the plan year. Now, employees will be able to roll over $500 into the following plan year, all but eliminating the wasteful spending that takes place each year as employees rush to consume their remaining FSA dollars due to the “Use It or Lose It” rule.
“Our appreciation goes to the Treasury for taking this important step to change the rule and mark an end to the ‘Use It or Lose It’ provision, allowing millions of middle class Americans to better and more cost-effectively manage their healthcare expenses,” said Joe Jackson, CEO of WageWorks. “This rule change eliminates the perceived risk of losing money when employees consider signing up for an FSA. The timing of this change could not be better, as most companies are now in their open enrollment period. We encourage all eligible employees to take advantage of this change and sign up for an FSA and lower their healthcare expenses.”
Flexible Spending Accounts are voluntary, account-based plans that enable millions of Americans to use pre-tax dollars to pay for eligible out-of-pocket healthcare expenses like prescription drugs, co-pays and vision and dental costs.
Effective in plan year 2014, employers that offer FSA programs will have the option of allowing participants to roll over up to $500 of unused funds at the end of the plan year. Effective immediately, employers that offer FSA programs that do not include a grace period will have the option of allowing employees to roll over up to $500 of unused funds at the end of the current 2013 plan year.