As circumstances continue to change the ways we live and work, the ways you and the people who depend on you change as well. Recently, we published a series of articles and helpful FAQs regarding how eligibility benefits can be adjusted and accessed during the COVID-19 pandemic. Thankfully, the guidelines around your Health and Dependent Care Flexible Savings Account continue to be just that—flexible.
IRS Notice 2020-29
As an employer and provider of FSA plans, IRS Notice 2020-29 allows you to make the following changes to your FSA plans. These options are just that—options. These changes are not mandatory.
- Extension of Time to Incur Claims — You may allow employees to apply all unused amounts remaining in their 2019 Health FSA or Dependent Care FSA as of the end of the 2019 plan year for reimbursement of eligible expenses incurred through December 31, 2020. This is if the plan year has an end date or grace period ending in 2020.
- Mid-Year Election Changes — You may permit employees to make the following prospective mid-year adjustments to their salary reduction elections for either, or both, Health FSAs and Dependent Care FSAs.
- Revoke an Election — Current participants can revoke current elections, less the greater of any reimbursements received or contributions made to date.
- Make a New Election — Current employees who did not previously elect to participate in an FSA program may now do so by making a new election.
- Increase or Decrease Current Elections — Further flexibility has been added allowing participants the ability to modify current election amounts without the previous requirement of a qualifying life event (QLE).
IRS Notice 2020-33
Specific to Health FSAs, IRS Notice 2020-33 allows you to optionally increase the maximum carryover amount beginning with the 2020 Plan Year from $500 to $550. Again, this is optional.
If you are an employer sponsoring a 2020 FSA Plan being administered by OneBridge, and are interested in learning about the optional mid-year plan changes permitted by the recent IRS notices, please reach out to your OneBridge Account Team to learn more.
Answers for Your BenefitWe understand that you or your plan participants may continue to have questions regarding how the COVID-19 pandemic, as well as the recent legislation, have affected health benefits accounts, we encourage you to head to our COVID-19 Updates page. Here, you’ll find answers to some common questions pertaining to the impact of the CARES Act on your Health FSA and Dependent Care FSA. We’ll be posting regular updates on this as they arise. If you require further assistance, you can always call our customer care line at 888.338.4415.