Section 1 Short title
This Act may be cited as the “Responsible Additions and Increases to Sustain Employee Health Benefits Act of 2018”.
Responsible Additions and Increases to Sustain Employee Health Benefits Act of 2018
A BILL
To amend the Internal Revenue Code of 1986 to allow the carryforward of health flexible spending arrangement account balances.
Sec. 2 Carryforward of health flexible spending arrangement account balances
In general— Section 106 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
“(h) Carryforward of health flexible spending arrangement account balances—A plan shall not fail to be treated as a health flexible spending arrangement under this section or section 105 merely because such arrangement’s account balance (or any portion thereof) determined as of the end of any plan year may be carried forward to the succeeding plan year.”
Coordination with limitation on salary reduction contributions—
In general— Section 125(i) of such Code is amended by redesignating paragraph (2) as paragraph (3) and by inserting after paragraph (1) the following new paragraph:
“(2) Coordination with carryforward of account balances—The dollar amount otherwise in effect under paragraph (1) for any plan year shall be reduced by the excess (if any) of—
“(A) the amount of any account balance which is carried forward to such plan year from the preceding plan year, over
“(B) $500.”
Conforming amendments— Section 125(i) of such Code is amended by striking “taxable year” each place it appears in paragraphs (1) and (3) (as redesignated by paragraph (1) of this subsection) and inserting “plan year”.
Coordination with cafeteria plan limitation on deferred compensation— Section 125(d)(2) of such Code is amended by adding at the end the following new subparagraph:
“(E) Exception for health flexible spending arrangements—Subparagraph (A) shall not apply to a plan to the extent of amounts in a health flexible spending arrangement which may be carried forward as described in section 106(h).”
Effective date— The amendment made by this section shall apply to plan years beginning after December 31, 2018.