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Health FSA Rollover


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Hypothetical: Employee elects to contribute $500 to her health FSA for 2014 and $0 for future years. Employee does not submit requests for reimbursement in 2014 or 2015 so the balance in her account remains $500 at the end of 2015.

As I read Notice 2013-71, the employee could theoretically rollover the $500 indefinitely if she remains employed at the employer (and even if she terminates and elects COBRA) to the extent that she does not submit any requests for reimbursement.

My question is can the employer amend its plan to adopt the rollover provision but state that, in specified circumstances such as this, an employee will forfeit the $500 at the end of (in my example) 2015?

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