Last year's change to the longstanding use-it-or-lose-it rule for flexible spending accounts is driving double-digit enrollment growth.
Benefit and payment firm Alegeus Technologies said that clients who have actively promoted the FSA rollover allowance to their employer groups and eligible employees are seeing 11 percent incremental growth in FSA enrollment and 9 percent growth in FSA elections—compared to a flat overall FSA market growth.
Last fall the U.S. Treasury Department issued new rules that let employers offer employees the $500 carryover. Previously, unused employee FSA contributions were forfeited to the employer at the end of the plan year or grace period, which industry insiders say were a barrier to adoption.
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