Some employers may want to delay implementing the grace period for flexible spending account plans (mentioned in this previous post here) until the uncertainties regarding how the grace period might impact health savings account are resolved. You can read about the issue in the following articles:
- From Hewitt: “New FSA Extension Creates Issue for HSA Participants”
- From Spencer Benefits Reports: “Sec. 125 Grace Period May Create Roadblock For HSA Participation”
The Hewitt article indicates that the “Treasury hopes to issue formal guidance allowing an individual waiver or other solution” but states that the “timing of the guidance, the specific solution, and its associated administrative implications are currently uncertain.”
See also this article from Trucker Huss which points out an administrative difficulty for implementation of the new rule under an FSA that has been amended to provide for the grace period and which also utilizes debit cards: “Section 125 Plan 2½ Month Grace Period: Participants’ Bonus and Administrators’ Bane.”