Under the Consolidated Appropriations Act of 2021, signed by President Trump on December 27, 2020, the Act allows for special Flexible Spending Account (FSA) and Dependent Care Spending Account (DCFSA) rules that allow for extended spending timeframes for unused funds.
Because of the COVID-19 pandemic, individuals are more likely to not have their typical healthcare and dependent care spending, thus the Act allows individuals the opportunity, beyond what is normally in place, to spend down their funds. The act also provides individuals the opportunity to make changes to their accounts even though there is not a qualified life event.
The attached Legal Update provides additional information on this change. Employers will want to be sure to work with their spending account vendors and consulting teams to assure that the appropriate plan amendments are put into place to account for these changes.
Contact your Cowden representative for more information on this or other compliance issues.