In response to recent legislation and IRS guidance, FSAFEDS is announcing important changes to Health Care Flexible Spending Accounts (HCFSAs), Limited Expense Health Care Flexible Spending Accounts (LEX HCFSAs) and Dependent Care Flexible Spending Accounts (DCFSAs).
A Special Enrollment Period (SEP) will be held from June 1, 2021 to June 30, 2021. Current participants may increase or decrease their current elections to their DCFSA and/or their HCFSA. In addition, the 2021 SEP will allow those who did not enroll or re-enroll for 2021 during last fall’s Open Season, the opportunity to enroll for 2021 and gain access to available 2020 HCFSA carryover funds.
OPM is allowing unlimited carryover for re-enrolled HCFSA and LEX HCFSA participants for the 2020 and 2021 plan years. If an employee does not re-enroll in 2021, they will not have access to 2020 carryover funds.
The grace period to file claims for all DCFSA participants for the 2020 and 2021 plan years has been extended. The 2020 grace period is extended through December 31, 2021, and the 2021 grace period is extended through December 31, 2022.
DCFSA participants with a qualifying dependent child who turned age 13 during the 2020 plan year may use any unused funds from that plan year for eligible expenses for that child until they turn age 14. To qualify for this relief, enrollment in a FSAFEDS DCFSA in the 2020 plan year is required.
The 2021 DCFSA election maximum has been increased to $10,500 (or $5,250 for married taxpayers filing separately). Existing DCFSA participants may wish to accelerate their allotments now if they intend to increase their election. Current participants can do this by logging in to their FSA account online and adjusting the number of pay periods.
Resources
- To learn more about how to take advantage of these flexibilities or see examples how this might impact you, refer to the CAA Quick Reference Guide.
- If you have questions, direct them to FSA at 877-FSAFEDS (877-372-3337).