Human Resources
IRS’s Halloween Guidance “Treats” Health FSAs to $500 Carryover “Trick”

IRS’s Halloween Guidance “Treats” Health FSAs to $500 Carryover “Trick”


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The Internal Revenue Service (IRS) gave sponsors of health care flexible spending arrangements (FSAs) a Halloween treat on October 31, 2013, when the IRS issued Notice 2013-71 allowing employers to amend their health FSAs to allow for a $500 carryover of unused FSA amounts into the next plan year. An employer that sponsors a health FSA may implement the $500 carryover rule instead of allowing a 2-1/2 month grace period for unused health FSA amounts, as permitted under current law.

This Aon Hewitt bulletin discusses IRS Notice 2013-71.

Download IRS’s Halloween Guidance “Treats” Health FSAs to $500 Carryover “Trick”