Carry-over of Full Health FSA Remaining Balance: Provided there is a minimum $25 balance, the full remaining balance of unused Health FSA funds will be carried over from the 2020 plan year to the 2021 plan year (not limited to $550 as announced last year).
Extension of Dependent Care FSA Grace Period: The grace period for the 2020 Dependent Care FSA plan year has been extended until December 31, 2021, with a submission deadline of January 31, 2022.
Increase in Maximum Age of Eligible Dependents: The maximum age for eligible dependents under the Dependent Care FSA has been temporarily increased to age 14. In order to qualify for this relief, an employee must have been enrolled in Dependent Care FSA in 2020 and have a dependent child who turns 13 during 2020 or 2021.
Because of the administrative load involved in these changes, the current and former FSA administrators, Wex (formerly Discovery Benefits) and WageWorks, will need to impose a temporary “blackout period” in which they cannot process claims or issue reimbursements to participants for expenses incurred in 2020. This blackout period will begin April 16, 2021, and extend no later than the end of May 2021.
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