What is an extended grace period?
IRS Notice 2005-42 modifies the Use-or-Lose Rule to allow participants to access any unused amounts remaining in a Flexible Spending Account (FSA) or a Health Reimbursement Account (HRA) at the end of the Plan Year to reimburse eligible expenses provided during a grace period after the close of the Plan Year. Note: The IRS does not require Plans to include the extended grace period. You should refer to your Plan Highlights to see if the extended grace period is applicable to your Plan.
