Wurzelbacher explains that the IRS views the reimbursement provided by medical flexible accounts as a self-insured health plan. Because an employee can get to flexible account money even before it is fully paid in, the business has to carry any early reimbursements. If the employee quits before the money is paid back, the employer takes the loss. Because of that risk, Wurzelbacher said, Congress and the IRS have left it up to each business owner to individually determine what his risk will be when it comes to flexible medical account limits. Workers, too, have to determine just how much they want to contribute to their cafeteria plan accounts.
Careful computations mean no wasted cafeteria plan money.
It does require some extra work, but most employees agree that the time spent is a small price to pay in exchange for accessible expense cash in these tax-advantaged accounts. U.S. Highway 1, North Palm Beach, Fl. Bankrate Inc. all rights reserved. Inc. All Rights Reserved.