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Flexibility in Flexible Spending
The Internal Revenue Service has provided guidance in Notice 2005-86 on the interaction of the 2.5-month grace period for a health flexible spending arrangement (health FSA) (established earlier by Notice 2005-42) and an individual's eligibility to contribute to Health Savings Accounts (HSAs).
Notice 2005-86 is available online at www.irs.gov/pub/irs-drop/n-05-86.pdf. Notice 2005-42 is available online at www.irs.gov/irb/200523_IRB/ar11.html.)
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