Technical Bulletin – 2016 Issue 1 – IRS Provides Additional Guidance on Health FSA Carryovers

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On December 16, 2015, the IRS issued Notice 2015-87 which provided additional guidance for health Flexible Spending Accounts (“FSAs”) that include a carryover provision. Questions 21 through 23 of the notice describe how health FSA plans must treat carryover amounts for COBRA qualified beneficiaries; while, questions 24 and 25 of the notice address two permissible health FSA carryover restrictions that employers may impose.