Question of the Week

Posted by BAS - 10 November, 2016

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Q.- The last day of our 2016 FSA plan year is December 31, 2016. Is it too late to add a carryover provision so employees can carryover up to $500 of unused funds into 2017?

A.- No. It is not too late. You should consult your legal counsel, but it is our understanding that a plan amendment to add a carryover may be adopted on or before the last day of the plan year from which amounts can be carried over.

If your FSA has a grace period, the plan would have to be amended to eliminate the grace period before the end of the plan year to which the grace period relates, and then amended to add the carryover.

 


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