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New Deadline Stretches Flexible Spending Accounts
APWU Web News Article #61-05, Nov. 2, 2005
The eligibility period for employees to use funds in their Health Care and Dependent Care Flexible Spending Accounts has been extended through March 15, beginning with the 2005 plan year, the Postal Service has announced.
As a result, Flexible Spending Account (FSA) money withheld in 2005 will be available to employees for eligible items or services they receive through mid-March 2006. To be eligible, employees must be on the USPS rolls on Dec. 31, 2005, consistent with IRS regulations.
FSAs permit workers to have money deducted from their paychecks for out-of-pocket healthcare or dependent care expenses. Because they set aside pre-tax dollars, flexible-spending accounts save employees money.
However, many workers fail to take advantage of FSAs, or put only a small amount into the accounts, because regulations stipulated that employees forfeit any unused money at the end of the year. A ruling issued by the Treasury Department in May gave employers the option of extending the deadline for spending the money in the accounts.
