flex account $500 carryover question

[tibbitts]

I tried searching for this and surprisingly didn't find the answer, so:

Is the $500 carryover (assuming it's allowed by your plan) limited to one year? I'm not asking the common cumulative question: I know you can't accumulate carryovers (you can't add $500 each year.) My question is if I contribute $500 in year x, and carry over all $500 to year x+1, is that considered money in my flex plan that will continue to be available for use in year x+2?

[Psyayeayeduck]

You are only able to transfer $500 to the rolling next year per year and that is it. Doesn't matter where the other amounts came from in any year.


*Edit: Corrected

[tibbitts]

You are only able to transfer $500 to the next year per year and that is it. Doesn't matter where the other amounts came from in any year.

I'm asking because twice I was told by customer service reps that the $500 would essentially carry forward forever, but yesterday (of course, nearly the end of the year) was told that my 2016 contributions (now $400 left - I contributed $0 in 2017) would vanish at the end of this year.

Is this, or can it be, a provider-specific rule? Or is it IRS-determined? And yes our plan does do the $500 carryover vs. the grace period.

[Psyayeayeduck]

From what

You are only able to transfer $500 to the next year per year and that is it. Doesn't matter where the other amounts came from in any year.

I'm asking because twice I was told by customer service reps that the $500 would essentially carry forward forever, but yesterday (of course, nearly the end of the year) was told that my 2016 contributions (now $400 left - I contributed $0 in 2017) would vanish at the end of this year.

Is this, or can it be, a provider-specific rule? Or is it IRS-determined? And yes our plan does do the $500 carryover vs. the grace period.

From what I gathered, the $500 is for the following year only. So it does look like the $400 will expire by the end of the year. I found this online and it seems that the 2nd FAQ answers your question: http://amben.com/demos/marketing/FSA_Em ... verFAQ.pdf


Ask your HR.

[memcpy]

$500 carryover continues as long as you are with the same employer. That is what the answer I got from my employer and same is happening from last 3 years.

After job termination, anything unused in FSA by end of the year will be forfeited.

[tibbitts]

You are only able to transfer $500 to the next year per year and that is it. Doesn't matter where the other amounts came from in any year.

I'm asking because twice I was told by customer service reps that the $500 would essentially carry forward forever, but yesterday (of course, nearly the end of the year) was told that my 2016 contributions (now $400 left - I contributed $0 in 2017) would vanish at the end of this year.

Is this, or can it be, a provider-specific rule? Or is it IRS-determined? And yes our plan does do the $500 carryover vs. the grace period.

From what I gathered, the $500 is for the following year only. So it does look like the $400 will expire by the end of the year. I found this online and it seems that the 2nd FAQ answers your question: http://amben.com/demos/marketing/FSA_Em ... verFAQ.pdf


Ask your HR.

Thanks, but honestly I had found that link already and kind of dismissed it when I read this and had no idea where 2015 was coming from:

No. The rollover amount from one year to the next is capped at $500. For example, if a participant has $500 that rolls over from 2016 to 2017, and then they contribute $500 in 2017, but do not file any claims for 2015, the rollover amounts cannot be combined to $1,000 to be rolled over into 2017—only $500 can be carried forward.

I don't understand why claims from 2015 factor into their answer.

[NorCalDad]

I would ask your HR office. I know in our case, we forfeited the remaining carryover funds after one year despite getting conflicting information from the FSA administrator.

Side note: If at all feasible, I would switch to an HSA, which doesn't face such limitations. I can't stand our health FSA administrator and always find it to be an open enrollment guessing game and/or flurry of spending down funds.

[tibbitts]

$500 carryover continues as long as you are with the same employer. That is what the answer I got from my employer and same is happening from last 3 years.

After job termination, anything unused in FSA by end of the year will be forfeited.

So you agree with two of three customer service reps; the problem is the outlier is apparently the person in charge of my plan. That's why I'm wondering if it's a rule I can dispute or just a restriction they're allowed to have in their plan.

[tibbitts]

I would ask your HR office. I know in our case, we forfeited the remaining carryover funds after one year despite getting conflicting information from the FSA administrator.

Side note: If at all feasible, I would switch to an HSA, which doesn't face such limitations. I can't stand our health FSA administrator and always find it to be an open enrollment guessing game and/or flurry of spending down funds.

At least in our case, HR really has nothing to do with the Flex; they're just a conduit that enables employees to purchase the plan from the insurance company and the paycheck deductions happen. They don't get involved in the administration of it.

[pangea33]

I think they're assuming you are spending some money every year, so that you're always into the next year's $500.

I lose my previous year's rollover after the end of March if I don't spend it.