What happens if funds are not used in a plan year?
The IRS rules state that you “use it or lose it.” So any funds left in the account are lost. On average, less that 2% of the account funds are typically lost. Employees often use their account balances at year end to pay for eyeglasses, eye examinations, medical examination or other preventative medical expenses eligible under the plan. For groups of 20 or more employees, COBRA would apply.
