Final answer:
The type of account that does not permit employees to carry over any remaining balance from year to year is a use-it-or-lose-it account. Examples include FSAs and vacation accrual accounts.
Step-by-step explanation:
The type of account that does not permit employees to carry over any remaining balance from year to year is a use-it-or-lose-it account. In this type of account, any unused balance at the end of the year is forfeited and cannot be carried over.
An example of a use-it-or-lose-it account is a Flexible Spending Account (FSA). FSAs are often offered as part of employee benefits packages and allow employees to set aside pre-tax dollars to cover eligible medical, dental, and vision expenses. However, any funds not used by the end of the plan year are forfeited.
Another example is a Vacation Accrual Account. Some companies have policies where employees earn vacation days throughout the year but any unused days at the end of the year are not carried over. These types of accounts encourage employees to take time off and prevent excessive accumulation of vacation days.
The type of account that does not permit employees to carry over any remaining balance from year to year is called a Use-It-Or-Lose-It account, commonly associated with Flexible Spending Accounts (FSAs). Employers offer FSAs as part of their benefits package, allowing employees to set aside pre-tax dollars for eligible healthcare and dependent care expenses. However, a key feature of the FSA is that it operates on a use-it-or-lose-it basis, meaning any funds that are not used by the end of the plan year are forfeited, prompting employees to plan carefully and ensure they spend their allocated funds within the required timeframe. Some FSA plans may offer a grace period or allow a limited carryover but this is not a standard feature.