Near the end of 2013, the IRS issued Notice 2013-47 that permits a cafeteria plan to provide for the use of up to $500 of any unused amount remaining in the health FSA in the immediately following plan year (the “carryover” provision). This provision is optional, requires a plan amendment, and cannot be offered if the cafeteria plan allows a grace period. One of the outstanding questions around the carryover provision is the effect it has on HSA eligibility. Recently, the Office
of Chief Counsel for the Internal Revenue Service issued a memorandum that informally addresses the interaction of the carryover on HSA eligibility and provides some solutions that may allow an individual retain HSA eligibility and the carryover.

Click the link below for more details.


HSA Rollover Informal Rules