Will my prior year Medical FSA or Limited Purpose (LFSA) “carry over funds” be carried over to the next plan year on January 1?
Any funds of $500 or less that are still in a participant’s FSA or L-FSA on 12/31 will automatically be carried over and be there on January 1st in addition to any funds that you pledged for 2018. For example:
· I pledged $1,000 in an FSA for 2017 and the same amount again in 2018.
· On 12/31/2017, I’ve only used $400 of the $1,000, which leaves a balance of $600.
· I will forfeit $100 but the other $500 will carry over into 2018.
· On 1/1/2018 I will have $1,500 in my FSA ($500 from 2017 that carried over plus $1,000 as my new election for 2018).
· PayFlex will use the $500 leftover from 2017 on any of my claims in 2018 before touching the $1,000 for 2018.
Will the deposit of the carry over funds reduce my current payroll deduction for the pledge I have selected this year?
No, the carry over funds are deposited into your account and will not affect your current payroll deductions. The carry over funds are added to your available funds for the plan year. For example:
· You have $500 in 2017 Medical FSA funds to be carried over in January of 2018.
· You pledge $1,200 in your 2018 Medical FSA and the payroll deduction will be $50 per paycheck.
· In January 2018, your 2017 carry over funds in the amount of $500 are deposited into your current active account. Your total Medical FSA funds available for 2018 now amount to: $1,700.
· Your contributions will continue to be the $50 payroll deduction from your paycheck until the end of the year.
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