Administration Supports Rollover

The Bush administration’s recently released budget proposes to allow up to $500 in medical/dental FSA accounts to be carried forward to the next year. That is a repeat of a provision in last year’s budget that didn’t gain congressional approval. The administration is further proposing to allow account holders to take out up to $500 of unused money in those accounts as a taxable withdrawal, or to use that money toward a medical savings account health plan-currently unavailable to federal employees-or toward an “employer funded retirement plan.” The changes would be effective in calendar 2004 at the earliest.