Employee Flexible Spending Accounts at Issue
New interpretations by officials with the Internal Revenue Service  are changing this mindset. Based on the original 1989 regulations, employers can, indeed, carry over funded programs from one year to the next.
While employees may not carry over any funds, the advantages of employers being able to do so is attractive for workers because it may mean that more employers will fund healthcare benefits.
The officials did make it clear, however, that the IRS never intended that regulations apply to employer-funded FSAs without any employee pretax contributions and those that are not part of a cafeteria plan.