What happens to the previous plan year funds that I do not use during the extended grace period time frame?
Any funds remaining in your account after the end of the extended grace period are forfeited.
What is an extended grace period? (HRA)
IRS Notice 2005-42 modifies the Use-or-Lose Rule to allow participants to access any unused amounts in a Health Reimbursement Account (HRA) at the end of the plan year to reimburse eligible expenses provided during a grace period after the close of the plan year. Note: The IRS does not require plans to include the extended […]
I am a participant in the plan for this current plan year, but will not re-enroll in the plan for the next plan year. Does the extended grace period rule apply to me at the end of this current plan year?
Yes. As long as you are a participant in the plan through the end of the plan year and have funds remaining at the end of the plan year, you may submit claims for eligible services provided during the extended grace period.
If I terminate employment during the plan year, does the extended grace period apply to me?
No. You must be a participant in the plan on the last day of the current plan year to take advantage of the extended grace period. Note: the exception to this rule is when COBRA (if offered by your employer) is elected for the account.
What is the length of the extended grace period?
If your plan includes the extended grace period, it is for 2-1/2 months after the end of the current plan year. You should refer to your Plan Highlights for the time frames that are applicable to your plan.
