IRS issues guidance regarding $2500 FSA Limit

The IRS issued Notice 2012-40 regarding the $2,500 FSA limit enacted by Health Care Reform.

There is a lot of welcome news in the Notice including:

• clarification that the limit applies to plan years beginning after December 31, 2012
• plans may adopt conforming amendment at any time through the end of 2014
• for plans with a grace period, amounts carried over will not apply to the $2,500 limit
• relief may be available for reasonable errors in applying the limit

For more details read our ErisaALERT 2012-10.