If new law legislation introduced today becomes law, the days of the FSA "use it or lose it" rule could become a thing of the past.
The Medical Flexible Spending Account Improvement Act, introduced today by Senators Ben Cardin, D-Md., and Mike Enzi, R-Wyo., would allow consumers to pay taxes on and withdraw any remaining funds in their employer-sponsored FSAs. Rules require that any leftover balance in an FSA must be forfeited to the employer at the end of the plan year.
"It is time to modernize FSAs to eliminate this burdensome 'use it or lose it' rule," Cardin said when introducing the bill. "It is both fair and sound health policy to allow FSA participates to cash-out remaining funds at the end of the plan year rather than forfeiting the balance to their employer."
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