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Health Products for You talks about FSA rollover and identifies what and when you can rollover your Flexible Spending Account contributions.
Do FSA rollover?” is another frequently asked question we hear. Contributions to your Flexible Spending Account are done via a pretax, payroll deduction to help offset the costs of some FSA eligible items. The maximum contribution amounts and deadlines are set by the Internal Revenue Service (IRS). Normally, your Flexible Spending Account or FSA pretax contributions are forfeited at the end of your plan year, typically December 31. Due to the current pandemic, it has become more difficult to properly use these accounts. This has led the IRS to change some rules which cover deadlines and FSA rollovers that may benefit you. Here we shed some light on these changes and help you maximize your FSA account.
In a normal world, the IRS sets maximum contributions, FSA rollover amounts, and deadlines for those with FSA accounts. But of course, the last 18 months or so have not been “normal.” The Covid-19 pandemic has turned the world upside down and our healthcare too. Typical FSA contributions/deadlines include:
Due to the current pandemic, the IRS has provided FSA Covid relief by loosening some of these guidelines for employers. While these changes have been set by the IRS, it is your employer who must decide to offer them to their employees. These changes were enacted due to the Consolidated Appropriations Act (CAA 2021) passed by Congress. These changes include:
Here’s a breakdown for the 2022 HSA and FSA contribution year compared to 2021 from the National Law Review website natlawreview.com:
|
Health Plan Limits |
2021 |
2022 |
|
Health FSA Contribution Limit |
$2,750 |
$2,850 |
|
Health FSA Carryover Limit |
$550* |
$570 |
|
HSA Contribution Limit (Individual) |
$3,600 |
$3,650 |
|
HSA Contribution Limit (Family) |
$7,200 |
$7,300 |
|
HSA Catch-Up Contribution Limit (age 55-plus) |
$1,000 |
$1,000 |
|
HDHP Minimum Deductible (Individual) |
$1,400 |
$1,400 |
|
HDHP Minimum Deductible (Family) |
$2,800 |
$2,800 |
|
HDHP Maximum Out-of-Pocket Amount (Individual) |
$7,000 |
$7,050 |
|
HDHP Maximum Out-of-Pocket Amount (Family) |
$14,000 |
$14,100 |
*Special FSA COVID-19 relief gives employers the option to allow employees to carry over their unspent 2021 FSA balance into 2022.
Employers that offer FSA plans to their employees were granted further flexibility under the Taxpayers Certainty and Disaster Tax Relief Act of 2020. Under this act, FSA plans have additional discretion in 2021 and 2022 to adjust their plans due to unanticipated consequences of this seemingly un-ending pandemic. The IRS issued Notice 2021-15 which allowed flexibility for employers such as:
These are all great changes by the IRS to allow employers the flexibility to manage their FSA plans, but employers are not required to enact any of these IRS changes.
You should talk to your employer or HR department on FSA rollover AND the changes they have adopted that can maximize your FSA contributions.
Meanwhile, check out HPFY’s wide range of FSA eligible items and buy from our FSA store
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