PEBB’s flexible spending arrangement grace period remains the same
The PEBB Program has chosen to continue the flexible spending arrangement (FSA) grace period option for plan years 2013 and 2014. This means FSA participants will have until March 31, 2014 to claim unused 2013 FSA funds, and until March 31, 2015 to claim unused 2014 FSA funds. See note below.
On October 31, 2013, the U.S. Department of Treasury and the Internal Revenue Service announced an optional change to the “use it or lose it” rule. The new “carryover” rule means plan sponsors could allow FSA participants to carry over up to $500 of unused FSA contributions to the next full plan year instead of forfeiting any unused amounts after the grace period of two-and-a-half months. Plan sponsors can choose to continue the current grace period or allow participants to carry over up to $500, but not both.
The PEBB Program will continue to allow a two-and-a-half month grace period after the end of the year to allow participants to spend all unused funds in their FSA. This allows participants to incur expenses through March 15 of the next year and submit the claims by March 31 against the previous year’s FSA funds.
The PEBB Program will continue to review the options, and begin communicating with stakeholders to determine which option will be best for members in the 2015 plan year.
- Unused 2013 FSA funds must be submitted to the previous Third Party Administrator, ASIFlex Services. Flex-Plan Services cannot reimburse 2013 unused funds.
- Unused 2014 FSA funds must be submitted to Flex-Plan Services.