What are the Plan End Types for FSA?
FSAs are "use it or lose it" accounts: any funds that employees haven't spent at the end of the year return to the employer. However, your employees have a 90-day run-out from the end of the year to submit claims for expenses during the plan year. You'll also have the option when you set up the plan to give your employee a little more flexibility at the end of the runout period by choosing one of two plan end types.
What FSA plan year end date should I choose?
The start date you choose can also determine when the plan renews:
- Choose a Full Plan Year End Date to have the FSA renew one year from the start date. If that date is the start of your insurance plans, workers will go through Open Enrollment for both FSA and insurance around the same time.
- Choose a Calendar Plan Year End Date to have the FSA line up with the calendar year.
If you choose the Calendar Plan Year option, your FSA plan year will be different from your contract's term, and you'll be charged the annual fee twice: once at the start of the Calendar Plan Year, and again when the plan renews in January.
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