Things to keep in mind if your plan will be offering rollover for the Flexible Spending Account (FSA).
Rollover and Grace Period
Plans may only have either grace period or the rollover option, not both. If your plan is removing grace period and adding rollover, any dates of service that you would like to use to claim your current plan year funds must happen within the plan year. There will no longer be the 2 ½ month extension at the end of the plan year for you to claim your unused funds.
After the final filing date for the prior plan year, any funds up to $500, or the maximum rollover amount set by your plan, will roll forward to be used towards dates of service in the current plan year.
If you are enrolled in a full purpose FSA in the current plan year and will be switching to a high deductible health plan with an HSA in the next plan year, confirm your rollover options with your employer. In order to maintain eligibility for HSA contributions in the new plan year, funds may not roll into a full purpose FSA.
If a limited purpose FSA is offered by your employer, your funds may roll into this type of FSA which only reimburses eligible dental and vision expenses.
If there is no limited purpose FSA available, any funds remaining after the final filing date for the plan year will be forfeit. You may also opt out of the rollover in order to be eligible to contribute to your HSA plan.
New Plan Year Elections
The amount that rolls forward into the new plan year is in addition to your maximum election amount allowed. You will then be able to claim your entire annual election, plus the rollover amount for eligible claims in the new plan year.