Question of the Week

Posted by BAS - 18 December, 2014

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Q.- Our health care FSA has a 9/1 through 8/31 plan year. I know the maximum contribution limit for health FSAs increases to $2,550 starting in 2015.  Can we allow participants who enrolled in our FSA effective 9/1/2014 to take advantage of this new limit now? 

A.-  Probably not.  The FSA contribution limit applies on a tax year basis. A non-calendar year FSA raises unique issues. If your FSA is amended now to incorporate the increased contribution limit, it is possible that someone could be reimbursed for the full $2,550 in 2014, and this would not be permissible. You should wait until the next plan year starting 9/1/2015 to allow for the increased contribution.


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