How to use a Flex Account?
If you’ve been healthy this year, congratulations. But if you’ve spent less on medical expenses than you expected when you set up your flexible spending account, you may be scrambling to find ways to use the money before it disappears. Many companies let employees set aside $2,000 to $3,000 annually in pre-tax money to spend tax-free on medical expenses. It’s a great deal, but the big catch is that you lose what you don’t use by the end of the plan year. The good news is that the U.S. Treasury Department issued a notice allowing employers to extend the flexible-spending account deadline for up to ten weeks. So employers now can give employees until mid-March rather than December 31 to clean out their accounts thanks to a change in the rules. But even though employers are now allowed to make this change, they aren’t required to do so — and a surprisingly large number have decided to keep their use-it-or-lose-it deadline on New Year’s Eve. Only about half the employers surveyed by the D
If you’ve been healthy this year, congratulations. But if you’ve spent less on medical expenses than you expected when you set up your flexible spending account, you may be scrambling to find ways to use the money before it disappears. Many companies let employees set aside $2,000 to $3,000 annually in pre-tax money to spend tax-free on medical expenses. It’s a great deal, but the big catch is that you lose what you don’t use by the end of the plan year. The good news is that the U.S. Treasury Department issued a notice allowing employers to extend the flexible-spending account deadline for up to ten weeks. So employers now can give employees until mid-March rather than December 31 to clean out their accounts thanks to a change in the rules. But even though employers are now allowed to make this change, they aren’t required to do so — and a surprisingly large number have decided to keep their use-it-or-lose-it deadline on New Year’s Eve.
