Health FSA Carryover Sample Plan Documents Available for Co-ops without Grace Periods
Co-ops should review updated plan documents with their legal counsel before returning them to CBA.
If your co-op is planning to adopt the new carryover feature that applies to health flexible spending accounts (Health FSAs) and limited-use health FSAs (LU-Health FSAs) effective for the 2014 plan year, sample plan documents are now available on Cooperative.com.
These include:
- 125 Plan Amendment – 2014 Health FSA Carryover
- 125 Plan Board Resolution – Adoption of 2014 Health FSA Carryover
- 125 Plan Summary of Material Modifications (SMM) – 2014 Health FSA Carryover
The carryover feature
If adopted, the feature allows participants to carry over up to $500 in unused account balances from one plan year to the next. Co-ops may offer the carryover feature or a grace period for their Health FSA plans, but not both, in the same plan year.
If your co-op decides to adopt the carryover:
- …and you currently do NOT offer the 2½-month grace period, your co-op may choose to adopt the carryover feature for the 2014 plan year. In this case, your co-op must execute an updated adoption agreement, which should be returned to CBA no later than October 9, 2014. Your 125 Plan will also need to be restated for the 2015 plan year in order to conform to all regulatory, design and operational changes since the last restatement.
- …and you currently offer the 2½-month grace period, you can adopt the carryover feature effective for the 2015 plan year. Your co-op’s adoption of the carryover will be a part of the overall restatement of CBA-administered 125 Plans later this year. Sample documents will be provided by CBA in the coming weeks, and completed required restated documents should be returned to CBA no later than October 9, 2014.
If your co-op decides to adopt the carryover feature for the 2014 plan year, it should inform employees as soon as possible. SMMs should also be distributed to participants.
More information on the carryover option can be found in the IRS Notice.
Adoption agreements and restated plan documents should be reviewed with your co-op’s legal counsel. More details on the carryover feature will be provided soon. If you have questions in the meantime, contact CBA at 1.866.673.2299.