No more “use it or lose it” on FSA

Employees with a health care flexible spending account may carry over up to $500 into the next plan year under a new Internal Revenue Service rule, effective immediately, but employers are not required to adopt the new rule. The rule change might encourage more people to open FSAs, which are tax-deductible and can be used for medical expenses including cost sharing and over-the-counter drugs.

However- Employers have to choose – between the 2 1/2 month grace carryover period, or allowing the $500 rollover.