Sec. 516. Health FSA carryforwards
456 words·~2 min read·
/bill/113/hr/3622/ih/section-516·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 125 is amended by redesignating subsections
(i)and
(j)as subsections
(j)and (k), respectively, and by inserting after subsection
(h)the following new subsection: For purposes of this title, a plan or other arrangement shall not fail to be treated as a health flexible spending or similar arrangement solely because under the plan or arrangement a participant is permitted access to any unused balance in the participant’s accounts under such plan or arrangement in the manner provided under paragraph (2). A plan or arrangement may permit a participant in a health flexible spending arrangement to elect to carry forward any aggregate unused balances in the participant’s accounts under such arrangement as of the close of any year to the succeeding year. Such carryforward shall be treated as having occurred within 30 days of the close of the year. The amount which a participant may elect to carry forward under subparagraph
(A)from any year shall not exceed $500. For purposes of this paragraph, all plans and arrangements maintained by an employer or any related person shall be treated as 1 plan. In the case of any taxable year beginning in a calendar year after 2013, the $500 amount under clause
(i)shall be increased by an amount equal to— $500, multiplied by the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting 2012 for 1992 in subparagraph
(B)thereof. If any dollar amount as increased under this clause is not a multiple of $100, such amount shall be rounded to the next lowest multiple of $100. No amount shall be required to be included in gross income under this chapter by reason of any carryforward under this paragraph. The maximum amount which may be contributed to a health flexible spending arrangement for any year to which an unused amount is carried under this paragraph shall be reduced by such amount. For purposes of this subsection, a flexible spending arrangement is a benefit program which provides employees with coverage under which specified incurred expenses may be reimbursed (subject to reimbursement maximums and other reasonable conditions). The term health flexible spending arrangement means any flexible spending arrangement (or portion thereof) which provides payments for expenses incurred for medical care (as defined in section 213(d)). . The heading for section 125 of the Internal Revenue Code of 1986 is amended by inserting after and health flexible spending arrangements . plans The item relating to section 125 in the table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting and health flexible spending arrangements after plans . The amendments made by this section shall take effect on the date of the enactment of this Act.