DATE: February 5, 2021
FROM: Janet Stanek, SEHP Director
RE: Flexible Spending Account Updates Due to Coronavirus Relief Act
The Federal Government recently passed the Coronavirus Relief Act. Included in that bill were some updated provisions for Flexible Spending Accounts (FSAs). The State Employee Health Plan will be implementing the following provisions of the Coronavirus Relief Act, Section 214.
CHANGE IN ELECTION AMOUNT
SEHP members with a Health Care, Limited Purpose or Dependent Care Flexible Spending Account will be able to modify the amount (but not in excess of any applicable dollar limitation) of their contributions to their Flexible Spending Account for Plan Year 2021.
SEHP Member Sara has a Dependent Care FSA for Plan Year 2021. She just found out that her remaining balance from Plan Year 2020 will carry over due to the new Coronavirus Relief Act provisions, so she decided to contact the SEHP to have her Plan Year 2021 withholdings decreased. Sara already spent some of her funds for Plan Year 2021, so the SEHP was only able to reduce her withholdings to cover what has already been spent.
HEALTH FSA CARRYOVER FROM PLAN YEAR 2020
SEHP members with a Health Care or a Limited Purpose Flexible Spending Account will see unused contributions from Plan Year 2020 carried over for use during Plan Year 2021. The rollover amount will be available to members after the Plan Year 2020 runout period has completed (April 30, 2021). This is an increase to the previously allowed carryover of $550 that was communicated during open enrollment.
SEHP members with a Dependent Care Flexible Spending Account will now see any unused contributions from Plan Year 2020 rolled over for use during Plan Year 2021. The rollover amount will be available to members after the Plan Year 2020 runout period has completed (March 16, 2021). Previously, there was no rollover benefit for the Dependent Care FSA.
SEHP Member Sara had a Dependent Care FSA in Plan Year 2020 to cover her daughter’s before and after school care. When school went virtual, before and after care were canceled and Sara had extra funds in her FSA without a way to spend them. Because of the Coronavirus Relief Act, Sara’s balance will carry over to her Plan Year 2021 account. Sara’s daughter has returned to before and after care, providing Sara an opportunity to spend down her balance.
SPECIAL CARRY FORWARD RULE FOR DEPENDENT CARE FLEXIBLE SPENDING ACCOUNTS WHERE DEPENDENT AGED OUT DURING PANDEMIC
EHP members that had a Dependent Care Spending Account in Plan Year 2020 and have a remaining balance, due to their dependent turning 13 during Plan Year 2020 and ageing out of eligibility for Dependent Care Spending Account coverage, will be able to resubmit for reimbursement for Plan Year 2020 expenses as well as use those funds in Plan Year 2021 until the dependent turns 14.
SEHP Member Dan had a Dependent Care FSA in Plan Year 2020 to cover his 12-year-old son’s after school care for the first half of the year. School was virtual due to the pandemic and Dan’s son turned 13 on May 25, 2020. When school started again in the fall, Dan’s son was able to return to after school care. Previously, Dan would not have been able to use his FSA dollars to cover his son’s after school care because he turned 13. Now, due to the extension, Dan can submit those after school care expenses from May – December 2020 for reimbursement.
Members who wish to make changes to their 2021 withholdings may submit a request through the Membership Administration Portal.
Should you have any questions, please email SEHPMembership@ks.gov