With the release of IRS Notice 2013-7 allowing flexible spending (FSA) plan participants to carryover over a maximum of $500.00 to the following year, questions were left unanswered as to whether participants who were carrying over FSA funds from 2013 would be able to contribute to a health savings account in 2014. Fortunately, informal guidance released by the IRS Office of Chief Counsel is now available.
The guidance has confirmed that in general individuals will not be eligible to participate in an HSA account if they carryover unused health FSA money. Employers and administrators should review the guidelines to ensure they understand the important highlights of the informal guidance.
View full article HERE.