Can I make a change to my Health Care FSA and Dependent Care FSAs due to the COVID-19 pandemic?
Yes, IRS Notice 2020-29 provides temporary flexibility for mid-year FSA elections this year. You can revoke an election, make a new election, or decrease or increase an existing election to the Health Care FSA or the Dependent Care FSA on a prospective basis, regardless of whether or not you have experienced a qualifying life event.
How are over-the-counter (OTC) items affected by the CARES Act?
Thanks to the Coronavirus Aid, Relief and Economic Security (CARES) Act, you can use your FSA or HSA funds to buy over-the-counter medications such as Tylenol and other pain relievers, heartburn medications, allergy relief and more, for the first time since 2011. You can also use your FSA or HSA funds for feminine care products.
Due to working remotely for the last few months and my child care center being closed, can I reduce my Dependent Care FSA election for the 2020-2021 plan year?
Yes. IRS Notice 2020-29 permits this type of mid-year election change to the Dependent Care FSA regardless of whether or not there is a significant cost or coverage change. This election change applies only on a prospective basis.
What will happen to any balance in my 2019-2020 Dependent Care FSA account that I cannot use due to closure or cancellation of my child’s summer camp or daycare?
The grace period for the 2019-2020 FSA year has been extended to December 31, 2020. This means that unused Dependent Care FSA money from the 2019-2020 plan year can be used for care incurred between June 1, 2019 through December 31, 2020.
How do I use my Healthcare FSA balance from the 2019-2020 plan year?
The grace period for the 2019-2020 FSA year has been extended to December 31, 2020. This means that unused Health Care FSA money from the 2019-2020 plan year can be used for care incurred between June 1, 2019 through December 31, 2020.***
*** Please note that you can only reduce your Healthcare FSA provided you have a positive balance in your account. ***