IRS clears up murky FSA rule: What you need to tell employees now

By Christian Schappel

The IRS finally caved and let health flexible spending account (FSA) holders carry over some funds from year to year. But that allowance opened up a whole other can of worms. 

The question the IRS’s new FSA rules have created: Can carrying over FSA funds prevent an individual from participating in a health flexible spending (HSA) account?
Answer: Yes.

The only exception: If your cafeteria plan offers an HSA-compatible health FSA, which tend to cover dental, vision and some preventive care and pharmaceutical expenses not covered under a health insurance plan.

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