Guidance Provides Flexibility for FSAs in Response to COVID-19 Pandemic
On Tuesday, May 12, the Internal Revenue Service released new guidelines that allow flexibility to current participants in the 2020 Short Plan Year Flexible Spending Account (January 1 – June 30, 2020).
The new guidelines are a response to the public health emergency caused by COVID-19, which has significantly reduced the availability of certain medical and dependent care services, causing many employees to have unused account balances in their Health Care and Dependent Care FSAs. In some cases, these unused balances are substantial.
The IRS guidelines temporarily permit 2020 FSA plans to extend the claims period for Health Care and Dependent Care FSAs. Unused funds in Health and Dependent Care FSAs that remain at the end of the current plan year (June 30, 2020, for Health FSA) or grace period (September 15, 2020, for Dependent Care FSA) may be used for new expenses incurred through December 31, 2020.
At the same time, the IRS announced an increase to the Health Care FSA Carry-Over limit, from $500 to a maximum of $550 for expenses incurred in the next plan year (July 1, 2020 – June 30, 2021).
Questions? Contact UNM Benefits at email@example.com.
New Eligible Expenses for Health Care FSA
Are you enrolled in the Health Care Flexible Spending Account? Health Care FSA funds can now be used for:
Check out the FSA | HSA Health Shopper for even more eligible expenses!