Flex account rules remain unchanged for City employees: use it or lose it
With all the media attention surrounding health care, you may be wondering if the rules regarding your flexible spending account for health care expenses have changed.
The short answer is no.
For 2013 and 2014, these optional accounts remain use-it-or-lose-it funds.
2013 FSA accounts
City employees who have money remaining in their 2013 flex accounts must use these funds by Dec. 31, 2013. (Although 2013 funds must be used to pay for expenses incurred in 2013, you have until April 15, 2014 to submit reimbursement requests. After April 15, any money remaining in your 2013 FSA account will be forfeited.)
2014 FSA accounts
Although the federal government did make some rule changes regarding the ability to carry over some flex account funds from one calendar year over to the next, these rule changes occurred too late for this year’s open enrollment.
Any money you want to place in a 2014 FSA account is still governed by the “use it or lose it” rule. Money in these accounts can only be used to pay for eligible medical or dental expenses incurred in 2014. Any money remaining in the account after the annual deadline will be forfeited.
2015 and beyond?
Although the federal government’s rule change would allow for the possibility of carrying over $500 from one calendar year to the next calendar year, City staff and union representatives need to evaluate whether this option is feasible and won’t negatively impact other employee benefits.
What’s a FSA?
FSA (Flexible Spending Accounts) are optional accounts employees set up during open enrollment to set aside money, before taxes, to pay for eligible health care expenses such as prescriptions, co-pays and eyeglasses. Any money that is not used by the annual deadline is forfeited.
HRA/VEBA (Health Reimbursement Arrangement/Voluntary Employee Beneficiary Association) accounts are different from Health Care Flexible Spending Accounts. Each month, the City of Minneapolis deposits an amount into your HRA/VEBA account to make pre-tax dollars available to you to pay for eligible health care expenses. Your HRA/VEBA account funds can be carried over from one year to the next year.
Published Nov. 26, 2013