The flexible spending account that allows ITD employees to set aside pretax money for anticipated medical expenses has become even more flexible.
A change in Internal Revenue Policy now gives participants an additional 2-1⁄2 months to incur and submit claims for reimbursement from the FSA account, according to the Idaho Office of Group Insurance.
In the past, if individuals did not have qualifying expenses and request reimbursement before the end of June, balances remaining in the account were lost. The new IRS rule enables employees submit reimbursement requests until Sept. 15.
“The grace period will run from July 1, 2005, through September 15, 2005,” according to a bulletin from the state’s group insurance office. “During this period, [employees] will be able to incur qualifying expenses and receive reimbursement for those expenses from the FSA plan, provided there are sufficient funds in the account and those funds have been set aside prior to June 30.”
In essence, the change allows participants to set aside funds over a 12-month period and incur expenses over a 14 1⁄2-month period. “The September 30 deadline for filing those expenses will remain the same.”
“The new rule is intended to give participants more time to pay for medical and dependent care expenses and also ease the year-end spending rush prompted by the prior rule” according to IRS officials.
The insurance office will outline the options for FSA participants by mail. Questions may be directed to the Idaho Office of Group Insurance at 332-1860.