A PPACA provision slated to take effect on January 1, 2013, limits FSA contributions to $2,500 per tax year. Last week, the IRS issued Notice 2012-40, which provides transition relief to non-calendar-year FSA plans. It establishes that the requirement does not apply for plan years beginning before 2013, and it clarifies that the term “taxable year” in the law refers to the plan year of the cafeteria plan as this is the period for which salary reduction elections are made.
Written and published by the National Association of Health Underwriters, June 4, 2012
