The rule will go into effect in plan year 2014.

Effective immediately, employers that offer FSA programs that do not include a grace period (most plans added the grace period a few years back to benefit their employees who were losing money at the end of the plan year) will have the option of allowing employees to roll over up to $500 of unused funds at the end of the current 2013 plan year.

For nearly 30 years, employees eligible for FSAs have been subject to the use-it-or-lose-it rule, meaning that any account balances remaining unused at the end of the year are forfeited.

The move, the departments announced, is making "FSAs more consumer-friendly and provide added flexibility."

"Across the administration, we are always looking for ways to provide added flexibility and commonsense solutions to how people pay for their healthcare," Treasury Secretary Jacob J. Lew said in a statement. "Today's announcement is a step forward for hardworking Americans who wisely plan for health care expenses for the coming year."

Really, maybe this "step forward for hardworking Americans" will help offset the $2,500 annual contribution limit imposed on FSA's by the Affordable Care Act for 2013, and the rule requiring a prescription to use FSA funds for over-the-counter medications imposed by the ACA in 2011.

The move, the departments said, directly responds to public comments.
"An overwhelming majority of feedback from individuals, employers, and others requested that the use-it-or-lose-it rule for health FSAs be modified," the announcement read. "Comments pointed to the difficulty for employees of predicting future needs for medical expenditures, the need to make FSAs accessible to employees of all income levels, and the desire to minimize incentives for unnecessary spending at the end of the year."

Private industry and consumer groups have been begging for this flexibility for the last 20 years, as the various administrative agencies continued to restrict and increase administrative burdens on FSA's.  Now that the administration is suffering a major set-back with the implementation of the ACA, they throw the market a bone with the lame statement that they "are always looking for ways to provide added flexibility and commonsense solutions to how people pay for their healthcare".  This is the same administration that gave us the Affordable Care Act, a 2,000+ page bill with thousands of additional administrative dictates, which is anything but "flexible and commonsense".  I guess we should be glad the Treasury felt the need to make a positive political statement, and make use of the FSA $500 carry-over.