SAN MATEO, Calif.--(BUSINESS WIRE)--
WageWorks (WAGE), a leader in administering Consumer-Directed Benefits, applauds the Department of the Treasury for its decision today to announce a very positive change to the “Use It or Lose It” rule, which required any leftover balance in a Flexible Spending Account (FSA) to be forfeited at the end of the plan year. Now, employees will be able to roll over $500 into the following plan year, all but eliminating the wasteful spending that takes place each year as employees rush to consume their remaining FSA dollars due to the “Use It or Lose It” rule.
“Our appreciation goes to the Treasury for taking this important step to change the rule and mark an end to the ‘Use It or Lose It’ provision, allowing millions of middle class Americans to better and more cost-effectively manage their healthcare expenses,” said Joe Jackson, CEO of WageWorks. “This rule change eliminates the perceived risk of losing money when employees consider signing up for an FSA. The timing of this change could not be better, as most companies are now in their open enrollment period. We encourage all eligible employees to take advantage of this change and sign up for an FSA and lower their healthcare expenses.”
Flexible Spending Accounts are voluntary, account-based plans that enable millions of Americans to use pre-tax dollars to pay for eligible out-of-pocket healthcare expenses like prescription drugs, co-pays and vision and dental costs.
Effective in plan year 2014, employers that offer FSA programs will have the option of allowing participants to roll over up to $500 of unused funds at the end of the plan year. Effective immediately, employers that offer FSA programs that do not include a grace period will have the option of allowing employees to roll over up to $500 of unused funds at the end of the current 2013 plan year.
The “Use It or Lose It” rule has often been identified as the biggest deterrent for employees considering whether or not to sign up for an FSA. While WageWorks has always made an effort to educate employer clients, their employees and families about how to best plan and spend their FSA funds, the company welcomes this change of the “Use It or Lose It” provision.
“We have been working with the Treasury and legislators for some time to remove the FSA ‘Use it or Lose It’ rule. Today’s news is positive for employers, employees and their families, as they now have more control and flexibility in managing their out-of-pocket healthcare expenses,” adds Jackson. “Now, those with an FSA won’t be forced to spend all of their funds by the end of the year, but instead, can roll these dollars into the next year and use them for necessary out-of-pocket expenses.”
WageWorks (WAGE) is a leader in administering Consumer-Directed Benefits (CDBs), which empower employees to save money on taxes while also providing corporate tax deductions for employers. WageWorks is solely dedicated to administering CDBs, including pre-tax spending accounts, such as health and dependent care Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs), Health Reimbursement Arrangements (HRAs), as well as Commuter Benefit Services, including transit and parking programs, wellness programs, and other employee benefits. WageWorks makes it easier to understand and take advantage of Consumer-Directed Benefits for more than 27,000 employers and more than 2.8 million people. WageWorks is headquartered in San Mateo, California, with offices in major locations throughout the United States. For more information, visit www.wageworks.com.
- Health Care Industry
- Flexible Spending Account
Justin Clerc, 800-652-6014