Agenda Item #33
Proposed Change to Medical Flexible Spending Account Management
In November 1, 2013, the federal Department of Revenue and the Internal Revenue Service announced the first rule change to its medical Flexible Spending Accounts (FSA) program since the benefit’s inception nearly three decades ago. Heretofore, participating employees faced the prospect of forfeiting any unused balances at the end of the plan year, and many employees declined to enroll because of the uncertainty in predicting eligible expenses. Under the new rule, plans may now permit participants to roll over up to $500 in unused FSA funds to the next plan year; this ability to allow rollover requires that if employers currently utilize the grace period approach, which extends reimbursements for a plan year to March 15 of the following year, then the grace period must be eliminated. Employers may not utilize both. More detailed information about the rule change is attached.
On November 12, the Superintendent’s Insurance Advisory Committee (SIAC) discussed this issue during its meeting, and as a result has made the following recommendations to the Superintendent and to the Board:
That the Board approve the three recommendations of the SIAC as delineated above.
Consent w/o Information - 11/19/2013
Authority for Action
IRS Notice 2013-71
Involves Expenditure of Funds Directly in the Classroom
Source of Funding
Agenda Item will not Require the Expenditure of Funds
Susan Standley, Director of Employee Benefits and Special Programs, x216
Attachment: FSA Rule Change Discussion.pdf
Attachment: Special FSA Enrollment Project Plan.pdf