The U.S. Treasury Department, announced on Thursday, that it will be changing the “use-or-lose” rule for health flexible spending accounts (FSAs) for the better.
Changes made to FSAs, which allow workers to use pre-tax dollars for certain medical cost, will give employers the option of allowing their employees to roll over up to $500 of funds that haven’t been used into the next year. The changes are the result of complaints from both employers and individuals that claim it is hard to predict future medical expenses and that the current rule causes a lot of unnecessary spending near the end of the year. Over 14 million families have FSAs and the new rule will allow workers to manage medical cost better. The new changes to FSAs can go into effect as early as the 2013 plan year, reports CNN Money.
Employees that have FSAs have had to monitor their funds and potentially lose money through the use-or-lose rule for the last 30 years.