New Rule Allows $500 Rollover for Health Savings Accounts
The Treasury Department has issued new rules on health spending accounts (HSAs) that allow rollovers of up to $500 from year to year, effective immediately.
According to the Treasury, more than 14 million Americans use HSAs , which allow employees to contribute up to $2,500 per year directly from their before-tax paychecks to pay for medical expenses not covered by insurance.
In the past, employees had to forfeit any money left in their HSA at the end of the year. With this new rule, up to $500 can now be rolled over into the next year's account - although employers are not required to offer this new option.
Treasury officials said that employers who choose to offer this option could begin doing so immediately, or elect to wait until 2014.
Employers who currently offer employees a grace period at the beginning of each new year to spend down their HSAs can either continue that practice or offer the $500 rollover, but cannot offer both.
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