Flexible spending accounts (FSAs) are health care benefits offered by many US employers. FSAs allow workers to set aside a sum from their pre-tax wages (the maximum will be US$2,500 next year) to spend on a range of health care benefits.
Until now, the FSAs had to be spent in full each calendar year, or be forfeited.
Eyeglasses and contact lenses have tended to be a popular way to spend any excess left in FSAs in the lead-up to December 31. The US eye care industry takes full advantage of the annual FSA deadline, with end of year advertising campaigns reminding people that optical items are FSA-eligible.
However, a new regulation from the US Internal Revenue Service will allow taxpayers to roll over up to US$500 of their annual FSA balances to the following year.
The regulation, while likely to have a negative effect on optical sales in the December period, is designed to encourage more people to take advantage of FSAs and provide increased freedom on how – and when – to spend the benefit.
