Flexible Spending Accounts, or FSAs, are an option provided by many employer healthcare plans that allow individuals to put a portion of their pre-taxed pay aside for health care expenses. Many Americans are already seeing changes to their healthcare plans in 2014 and FSAs are no exception. Let’s take a closer look at how FSAs will change this year under the Affordable Care Act.
$2,500 Maximum Cap. Beginning this year, the maximum amount of money that an individual can contribute to their FSA will be $2,500. However, it is worth noting that participating spouses can each contribute their maximums towards their household total. In this case, a couple could feasibly have a combined $5,000 household FSA total.
Changes to “Use It or Lose it”. Previously, an individual could not carry over a remaining FSA balance into the next year (although some allowed for a grace period up to March 15). This was known as the “use it or lose it” rule. Beginning this year, individuals have the option to carry over up to $500 from their FSA account to put towards the next year. However, employers have the choice of whether they want to offer the $500 carryover. If they prefer to offer the March 15 grace period, they can do so instead; an employer cannot offer both options.
Want to know more about how your healthcare will change in 2014? ERM Insurance Brokers in Irvine, California is ready to answer your questions!
Call (949) 222-0444 to learn more.