FSA Rollovers Backed

Legislation has been offered in the House (HR-176) by Rep. Edward Royce, R-Calif., to loosen rules regarding flexible spending accounts, which the government is set to launch for all executive branch employees in July. FSAs will allow employees to set aside payroll money pre-tax to be used for either dependent care or for medical and dental care. Under current law, all money put into such accounts is “use or lose”-that is, any amount not used up by the end of a calendar year is forfeited. The measure would allow unused medical care account values to be carried over from one year to another. Advocates of change say the current policy acts as a deterrent to employees setting up such accounts-especially lower-income workers-and causes wasteful year-end spending as participants try to find ways to use up the money they have designated.