The flexible spending account program for federal employees will hold a “special election period” June 1-30 due to a series of changes in the law governing that program as well as similar private sector programs, OPM has said.
During that period, employees not enrolled will be allowed to begin health savings and/or dependent care accounts for the remainder of this year and current enrollees will be allowed to either increase the amounts they have designated for such accounts up to the annual maximums. Those limits are $2,750 for health care accounts and are being raised to $10,500 from the normal $10,000 for dependent care accounts.
Current allocations also can be decreased although employees who do so “cannot receive a refund of allotments from pay they have already made to their FSA account(s) year-to-date. In addition, participants cannot decrease their election below the amount already allotted to the FSA account or the amount already reimbursed for eligible expenses, whichever is greater,” OPM said.
Changes are to be made through the www.FSAFEDS.com site.
In a “benefits administration letter,” OPM also called attention to other changes, contained in a series of laws and IRS notices responding to the pandemic upsetting normal health care and dependent care spending patterns:
· The standard limit of $550 in unspent health savings account funds that can be carried forward from one year to the next has been waived for 2020 funds carried into 2021 and will be waived again for 2021 funds carried into 2022. However the individual must have an account for the following year, including if pertinent one newly opened during the June special election period for unused 2020 funds.
· The grace period for using unspent dependent care account funds from the prior year, normally expiring each March 15, is being extended through the end of this year for 2020 funds and will be extended to year-end 2022 for 2021 funds.
· Those who had dependent care accounts in 2020 with a qualifying dependent child who turned age 13 last year—the age after which eligibility for day care expenses related to a child normally ends—may use any unused funds from 2020 until the child turns age 14.
“Participants do not have to take any action to be permitted these flexibilities,” OPM said.
OPM had indicated in April that such an opportunity was ahead although it provided few specifics at the time.