The availability of carryover funds differs when carrying over between a healthcare to healthcare FSA versus from the healthcare to limited purpose FSA.
– Healthcare to Healthcare: The carryover amount is available to the participant on the first day of the new plan year. This means that the carryover amount is simultaneously available to pay previous plan-year expenses and current plan-year expenses during the previous plan year run-out period.
– Healthcare to Limited Purpose: The carryover amount is available to the participant on the first day following the end of the run-out period. This means any current-year dental or vision claims incurred during the run-out period that were not reimbursed by a current-year limited purpose election would be reimbursed once the carryover funds are available.