![]() ![]() Communications to employees can include the following tips: For plans with a grace period, reminders should be sent prior to March 15. Overlap and expenses incurred during the grace period must be claimed before the run-out period ends.Īt the same time, employers should remind participants about the kinds of purchases that can be made with FSA dollars. ![]() For plans that offer a grace period option and a run-out period, both periods.For example, if the account holder carries over $500 dollars and submits $200 in run-out expenses, he or she will have $300 remaining in carryover funds during the rest of the year. Carryover funds remaining after run-out expenses are reimbursed will still be available to the account holder during the rest of the plan year. For plans that offer a carryover option and a run-out period, run-out expenses will be deducted from the carryover amount (up to $500).31, the run-out period for filing claims would end on March 31. After this time, all remaining money is forfeited. In addition, if a plan has a “run-out period,” employees typically have up to 90 days beyond the end of the plan year to request reimbusement for expenses incurred during the previous plan year. Plans can offer either the carryover feature or a grace period, but not both. If an FSA plan has the carryover feature, participants can roll over up to $500 of unused FSA dollars to the next year but will forfeit any excess over $500 at year-end. At the end of the grace period, all unspent funds must be forfeited. An optional grace period gives employees an additional two-and-a-half months to incur new expenses using prior-year FSA funds. Since changes were introduced to FSAs by the Treasury Department in 2013, there are three options for FSA extensions that plan participants should be aware of: 31, regardless of whether the plan has also adopted a grace period, in order to draw on those funds prior to forfeiture. In addition, if year-end health FSA plans have adopted a 90-day run-out period, all expense claims for the previous year must be filed by March. By planning ahead for both types of expenses, you will be able to stay on top of your budgeting goals and avoid any unexpected costs down the line.March 15 marks the annual grace period deadline for health care flexible spending accounts (FSAs)-the last day for participants in health FSA plans incorporating the optional two-and-a-half-month grace period to spend their remaining funds from last year (for plans ending Dec. Flexible expenses are those that vary from month to month while periodic expenses are those that occur regularly but not necessarily every month. Understanding the difference between flexible and periodic expenses is an essential part of managing your finances wisely. It’s important to plan ahead for these types of payments because they can come up unexpectedly if you aren’t prepared for them. These payments usually happen at least once per year but may occur more frequently depending on the type of service you use or your specific state laws. Examples include insurance premiums, taxes, and car registration fees. Periodic expenses are costs that occur regularly but not necessarily every month. These types of expenses often depend on your lifestyle, so it can be difficult to predict them accurately in your budget. Examples of flexible expenses include buying new clothes for yourself or going out to eat with friends on the weekend. This includes things like groceries, entertainment, and clothing. What Is a Flexible Expense?įlexible expenses are costs that vary from month to month. Let’s take a look at what makes a flexible expense different from a periodic expense. Knowing which types of expenses fall into each category can help you budget and plan ahead more effectively. One of the most important concepts to understand is the difference between flexible expenses and periodic expenses. Managing your personal finances can be confusing. ![]()
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