The IRS on Oct. 31 issued modifications to Section 125, or so-called cafeteria plans, relaxing use-it-or-lose it regulations for employer-sponsored Flexible Spending Arrangements (FSAs). Under the changes, FSAs may be amended to permit participants to carry over up to $500 of unused amounts to the following cafeteria plan year. An “unused amount” is the amount remaining at the end of the run-out period for the plan year. Any unused amount in excess of $500 must be forfeited. Read the new regulation at www.irs.gov/pub/irs-drop/n-13-71.pdf