Flexible Spending Accounts Program


New Guidance passed in response to the COVID-19 pandemic.

Consolidated Appropriation Act of 2021 and the American Rescue Plan Act of 2021 were recently passed in response to the COVID-19 pandemic.


Plan changes are highlighted below:

HCFSA Plan Year 2020 

  • For the HCFSA Program, the Grace Period for Plan Year 2020 is extended through December 31, 2021. Plan Year 2020 participants may submit claims for eligible medical expenses incurred through December 31, 2021, using the balance in their Plan Year 2020 account, if any.

 

HCFSA Plan Year 2021

  • Plan Year 2021 HCFSA participants are allowed to cancel their deductions or increase or decrease their goal amounts one time only during Plan Year 2021, without a Qualifying Event, on a prospective basis for Plan Year 2021. This request must be submitted to the FSA program no later than September 30, 2021 in order for it to be processed. Such requests will take effect approximately 2 pay periods after the request is processed. 
  • For the HCFSA Program, the Grace Period for Plan Year 2021 is extended through December 31, 2022. Plan Year 2021 participants may submit claims for eligible medical expenses incurred through December 31, 2022, using the balance in their Plan Year 2021 account, if any.
  • An employee who ceases City service during Plan Year 2021 may continue to receive reimbursements from unused contributions through December 31, 2021 (including the Grace Period), as long as they are not submitting the same claims to another employer.

 

DeCAP Plan Year 2020 Changes

  • For the DeCAP Program, there is a Grace Period for Plan Year 2020.  A Grace Period is offered following the end of a Plan Year.  During this Grace Period for Plan Year 2020, participants may submit eligible claims incurred through December 31, 2021, using the balance in their Plan Year 2020 account, if any.
  • For Plan Year 2020 only, participants can submit claims for a dependent through the end of the year in which their dependent turns age 13. If the DeCAP participant has a remaining balance at the end of the year in which the child turns 13, the participant may continue to use those funds into year 2021 until the child turns age 14.

 

DeCAP Plan Year 2021 Changes

  • As a result of nondiscrimination testing for highly compensated employees, the Plan Year 2021 goal amount is $5,000. However, federal law allows a maximum benefit of $10,500 in 2021. Employees should consult with a tax advisor regarding additional tax deductions on their federal tax return.    
  • Plan Year 2021 DeCAP participants are allowed to cancel their deductions or increase or decrease their goal amounts one time only during Plan Year 2021, without a Qualifying Event, on a prospective basis for Plan Year 2021. This request must be submitted to the FSA program no later than September 30, 2021 in order for it to be processed. Such requests will take effect approximately 2 pay periods after the request is processed. 
  • For the DeCAP Program, there is a Grace Period for Plan Year 2021.  A Grace Period is offered following the end of a Plan Year.  During this Grace Period for Plan Year 2021 participants may submit eligible claims through December 31, 2022, using the remaining balance in their Plan Year 2021 account, if any.
  • Plan Year 2021 participants can submit claims for a dependent until their dependent turns age 13 in the calendar year 2021.
  • An employee who ceased City service during Plan Year 2021 may continue to receive reimbursements from unused contributions through the end of the Plan Year (including the Grace Period), as long as they are not submitting the same claims to another employer.

 


Please check back periodically for more information.


Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) 

The CARES Act allows an expansion of the types of medical/health care items that participants may claim through their HCFSA accounts by completing the HCFSA claim form, effective January 1, 2020. These include (1) menstrual care products and (2) over-the-counter medicines and drugs, without the need for a prescription. However, for over-the-counter medication, a Letter of Medical Necessity from your medical provider is still required.