U.S. government OKs $500 rollovers for flex health accounts
- October 31, 2013 - 8:42 PM
WASHINGTON – Workers who take advantage of tax-free accounts to pay out-of-pocket medical expenses could soon be allowed to carry over up to $500 from one year to the next.
For most of the last 30 years, employees who were eligible to use the so-called flex-spending accounts had to forfeit any unspent money at the end of the year.
A new rule will now permit employers to let plan participants roll over up to $500, the Treasury Department said Thursday.
Employers who sponsor the plans, however, are not required to offer the option.
Some plan sponsors may be eligible to start letting workers carry over the money at the end of this year, the Treasury announcement said. Others may have to wait until next year to start offering the feature.
The accounts allow employees to contribute as much as $2,500 a year directly from their pay before taxes are deducted. The accounts can then be used to pay certain medical expenses not covered by insurance.
Treasury estimates that 14 million people use the accounts.
© 2013 Star Tribune