Michelle Turner, MBA

It''s my understanding in most M&A transactions the FSA plans are not terminated or they are transferred to the buyer so that employees are not disrupted or lose their contributions. You may want to have the buyer review Rev. Rul 2002-32 (attached) with their counsel for the deal so that they can structure it to avoid a loss of coverage by their employees. IRS Rev. Rul. 2002-32, 2002-23 I.R.B. 1069.pdf

Thanks XTitan. I understood inflation-adjustment #s released in September were what Thomson Reuters used to calculate the expected increase to $2,700 and that generally around the 3rd Thursday in October is when the IRS releases the official health FSA rate. I wasn't aware the TCJA changed the process for how the inflation adjustments were used. So I haven't had a good possible explanation for the delay. It's been frustrating for clients because the IRS is delivering the FSA max limit change too late for them to adjust their printed OE guides...the only workaround I've been able to suggest is to print "estimated" or "projected" before or after the limit amount.

Xtitan, will you elaborate what is meant by "the FSA limit is now tied to the chained CPI-U, and there is some ambiguity in the application of the new rate"?