With the prominent rise in health savings accounts (HSAs), it is possible that other consumer-directed benefits are not getting as much consideration — particularly the flexible spending account (FSA).
FSAs have been around since the 1970s, helping account holders pay for many healthcare expenses. Ten years ago, partially due to our organization’s years of advocacy, the Internal Revenue Service (IRS) issued a ruling that allows employees to roll over a portion of unused FSA funds from one plan year to the following plan year. Before that, people would stress about losing money if they didn’t spend down their FSAs by the end of December. Now many employers have implemented a carryover feature that allows them to rollover up to $610 (for 2023), eliminating the year-end rush to spend down unused funds.
