• http://www.ontargetcoach.com/ Brent Pittman

    We have individual plans with HSA component. I agree the FSA “loose it or loose it” rule needs to be changed. Where does that money go?–back to the employers general coffer from my understanding.

    • MIchael Lewis

      Brent, technically, money in the FSA is the employer’s asset, so any cash remaining reverts back to him. Some employers use the returned funds to cover the administrative expenses of the FSA program; some might spread it pro-rata among the other participants in the FSA – there is no rule on what they have to do with it.
      The HSA corrects the “use it or lose it:” deficiency, so it is likely to eventually wipe out the healthcare FSA.

      Thanks for writing.

      • http://www.ontargetcoach.com/ Brent Pittman

        Michael,

        Thanks for the additional info about FSA and what happens if the $ isn’t spent.

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