IRS gives in a little on the use-it-or-lose it rule

After years of making people go through angst, the IRS recently issued Notice 2013-71, permitting up to $500 of unused flexible spending account (FSA) funds to be carried forward to the following year for utilization to pay health expenses.  Cafeteria plans often include FSA provisions so employees can pay for health care deductibles, etc. on a tax-free basis.   The employer has the option to provide such a provision in its cafeteria plan.   It can do so for 2013.    If such a provision is used, then the optional grace period (of up to 2½ months) cannot be used.   In the past, I have written articles advocating elimination of the use-it-or-lose-it rule.   Since then, the IRS has offered the grace period and, now, the optional $500 carry-forward.