Two weeks after the administration announced big changes to flexible spending accounts, plan administrators are speaking up about the changes. Their main message? They like the rollover amendment, and they think everyone else does, too.

Alegeus Technologies, a health care and benefit payments firm, surveyed more than 200 FSA administrators following the major FSA announcement to gauge their reactions and opinions.

Overall, respondents said they think there'll be significant employer rollover adoption for 2014 plan year and gains in both FSA enrollment and account contributions.

Recommended For You

Thirty-three percent of survey respondents think more than half of employers will adopt the rollover for 2014 plans, while 22 percent predict more than 75 percent will adopt.

Far fewer, though, think employers will amend the 2013 FSA plans to include the rollover: 47 percent of survey respondents predict that less than a quarter of employers will do so.

The U.S. Department of the Treasury and the IRS on Oct. 31 announced they were modifying the longstanding "use-or-lose" rule for flexible spending arrangements, allowing participants to carry over up to $500 of their unused balances remaining at the end of a plan year.

Effective immediately, employers that offer FSAs that don't include a grace period will have the option of allowing employees to roll over up to $500 of unused funds at the end of this plan year. An employer cannot offer a FSA carryover provision and a grace period at the same time, officials said.

"This policy change has been universally well received by our clients — who are very excited by its potential to drive measurable impact on both FSA enrollment and account contributions," said Tom Torre, chief executive officer of Alegeus Technologies. "All are eager to fully understand the nuances of the new rule and the practical considerations for implementation — so that they can capitalize on this forecasted growth."

Alegeus Technologies had been lobbying for four years to modify the use-it-or-lose-it provision.

The majority of survey respondents said they think both FSA enrollment and account contributions will increase 10 percent  to 25 percent for plan year 2014 as a result of this rule change.

Torre said, though, that anecdotal feedback from clients suggests those numbers could climb higher in subsequent plan years.

NOT FOR REPRINT

© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.