A recent survey of flexible spending account administrators suggests not many employers, at least this year, will take advantage of the IRSs recent change to allow FSA funds to be rolled over from year to year, but there will likely be significant employer rollover adoption for the 2014 plan year and modest gains in both FSA enrollment and account contributions.
The survey of 200 FSA administrators was conducted following the IRSs move earlier this month to allow a maximum of $500 in FSA funds to be carried over from year to year.
Results of the survey, conducted by Alegeus, a benefit and health care payment technology company, reveal:
80% say the rollover provision will be more compelling than the current grace period.
47% predict less than a quarter of employers will take advantage of the new rules to amend their 2013 FSA plans.
33% predict that more than half of employers will adopt the new rules for 2014 FSA plans, and 22% predict that 75% of employers will adopt the rollover rule for 2014 FSAs.
For employers looking to take advantage of the rollover for 2014, theres a simple amendment most third-party administrators will be providing to employers to change the plan to allow for this, says Bob Natt, executive chairman, Alegeus. And the most important thing an employer can do is communicate this let employees know they now have this option as they sign up for their benefits for 2014.
According to Alegeus customer data, two-thirds of existing FSA plans offer a grace period and one-in-four FSA participants forfeit money at the end of the plan year or grace period.
