FSA Limits Increased

The annual limit for flexible spending account health care accounts will rise by $1,000 to $4,000 in calendar year 2004. The increase comes after an IRS ruling holding that FSA account holders can claim reimbursement for over-the-counter drugs. In announcing the increase, the Office of Personnel Management also extended the current open season for taking out FSA accounts for 2004 by a week, until December 15. In guidance to agencies, OPM said that employees who already made elections for 2004 and who wish to change them in light of the higher limit may do so. The change does not affect dependent care accounts, whose maximum remains $5,000.