Federal employees will be allowed to carry money on their health savings accounts into the next year following a months-long lobbying effort by Sen. Ben Cardin of Maryland and other lawmakers in the region.
Some 323,000 federal workers set aside a portion of their earnings, tax-free, in flexible spending accounts, or FSAs, to pay for health expenses. Until now, they have forfeited money not spent by the end of the year.
The Office of Personnel Management announced last week that employees would be allowed to carry over up to $500 beginning in 2015. The decision followed a new Treasury Department rule last year permitting that practice for private-sector companies.
Federal employee unions supported the change.
The new rules “should encourage more employees to participate and take advantage of the savings in taxable income,” J. David Cox Sr., national president of the American Federation of Government Employees, said in a statement.
Cardin, a Democrat whose state is home to one of the largest concentrations of federal workers, made the issue something of a pet cause. He introduced legislation on the FSAs along with Republican Sen. Michael Enzi of Wyoming and organized a letter to OPM in December calling on the agency to adopt Treasury’s new guidelines.
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Contact Steven G. Cosby, MHSA with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.
