We all know that health flexible spending arrangements (FSAs), health reimbursement accounts (HRAs) and health savings accounts (HSAs) provide a tax-effective way of funding an employee’s health care expenses. But it is important for advisers to remember that these arrangements are creatures of the Internal Revenue Code (IRC). Consequently, the code provisions, as well as rules and regulations promulgated by the Internal Revenue Service, must be followed.
Earlier this year, the IRS issued an alert warning administrators of FSA, HRA and HSA plans and participants in those savings vehicles that some companies are misrepresenting the circumstances under which food and wellness expenses can be paid or reimbursed.
