Flexible Spending Accounts

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. ***

The 2020-2021 plan year limit for the health care account is $2,750 and dependent care account is $5,000. In addition, a grace period has been added to the health care account that will provide employees with an additional 2 1/2 months to incur claims. Employees will be able to incur FSA claims until August 15 for the previous plan year and submit claims up until October 31 for reimbursement.  The minimum amount which may be designated in either account is $200.

The Child Care Subsidy Plan is an employer-funded Flexible Spending Account. For the 2020-2021 plan year, the plan provides a plan year benefit of up to $1,000 pre-tax dollars. Please note that if you enroll in the Child Care Subsidy Plan, the maximum plan-year Dependent Care contribution is $4,000.00, in accordance with IRS regulations on calendar year maximums. 

Note: The Child Care Subsidy Plan is an employer-funded pre-tax plan. The University provides a calendar year contribution of up to $1,000 pro-rated over each pay period, which can be used for qualifying childcare expenses for eligible tax dependent children up to the earlier of age 6 or the start of kindergarten. The $1,000 is contributed directly into the Dependent Care FSA and reduces the $5,000 maximum contribution.

• Each year you decide how much to set aside for healthcare and/or dependent care expenses.
• Your contributions are deducted from your paycheck on a before-tax basis in equal installments throughout the plan year (June 1 through May 31).
• As you incur healthcare or dependent care expenses throughout the year, submit a claim form for reimbursement. Your claim will be processed and you will be reimbursed from your account. Use the convenient checklist to make sure you have everything you need to submit your claims.
• You will also receive a healthcare debit card WHICH IS ADMINISTERED THROUGH WAGEWORKS that can be used (at the point of sale) to pay for medical co-pays and eligible prescription drug expenses.

Please Note: When using the healthcare debit card, you will not be paying out of pocket, so there’s no need to fill out a claim form and wait for reimbursement.

Visit www.wageworks.com for a complete list of covered expenses.

Please remember that all FSA claims must be incurred within 2 1/2 months (by August 15th) of the end of the FSA plan year. If you do not have enough eligible expenses during the FSA plan year, you will lose this money. This is an IRS regulation known as the “Use it or Lose it” rule.

According to federal regulations, HSA participants are not eligible to participate in a regular Health Care Flexible Spending Account (FSA). However, HSA participants can participate in the Limited-Purpose FSA, which provides a tax-free way to save and pay for dental and vision expenses not covered by your health plan. All other Health Care FSA rules and features apply to the Limited-Purpose FSA—same maximum, same use-it- or-lose-it rule, same claim-filing deadline, and if you enroll, you will receive a debit card to pay for eligible dental and vision expenses. If you elect an HSA, you will receive one combined debit card.