Flexible Spending Account 2021 Updates

How The American Rescue Plan Act of 2021 Recently Passed by Congress Impacts FSAs

The American Rescue Plan Act of 2021 that was passed by Congress provides current participants of a Dependent Care Flexible Spending Account (those actively enrolled for 2021) the ability to increase their yearly maximum up to $10,500 ($5,250 for married individuals filing separately).

If you wish to increase your Dependent Care maximum for the remainder of the 2021 calendar year,  please complete an FSA Special Election form (HR-135a) and return it to the Office of Benefit Services (see the form for submission instructions).  Any changes to your election will be effective the first of the month following OBS’ receipt of your form. 

Please plan carefully when making any increases to your election.  

As a reminder, any carryover funds that you had from 2020 will automatically be reflected in your 2021 account balance. If these changes will affect the election you made for plan year 2021, you may request a change to your annual election(s), provided that the amount of the change is $250 or more.

To make a change to your FSA, you must complete an FSA Special Election form (HR-135a) and return it to the Office of Benefit Services (see the form for submission instructions). Any changes to your election will be effective the first of the month following OBS’ receipt of your form.

New for 2021 under the HealthCare FSA

Personal Protective Equipment (PPE) is now an eligible expense under the HealthCare FSA.

Example Scenarios: 

1. I understand that the dependent care limit has increased from $5,000 to $10,500.  Can I increase my dependent care FSA? 

  • Yes, under the American Rescue Plan Act (ARPA) if you are currently participating in the dependent care FSA you can increase your dependent care FSA up to a maximum amount of $10, 500 for calendar year 2021.  You will need to complete an FSA Special Election form (HR-135a) to add the funds to your dependent care FSA.  The election will be effective the first of the month following receipt of the form by the Office of Benefit Services. Please plan carefully and keep in mind that the increased amount can only be used on future expenses.

2.  I forgot to enroll in a Dependent Care FSA during Open Enrollment, can I enroll now?

  • At this time, you cannot enroll in the dependent care FSA unless you have experienced a qualifying event.  Examples of a qualifying event would be:
    • Change in marital status (marriage, legal separation, divorce, or death of employee's spouse).
    • Change in employment status (for employee, their spouse) 
    • Birth or date an employee adopts a child, or placement for adoption.
    • Death of spouse or dependent.
    • Change in dependent’s eligibility (for example, employee's child reaches age 13) change in child 
    • Change in care provider or cost or coverage, such as a significant cost increase charged by the current day care provider, or a change in the day care provider. 

If you do experience a qualifying event during the plan year, please submit an HR-135 form to the Office of Benefit Services within 30 days of the event.  Your election will be effective the first of the month following receipt of the form.

3. My daycare in February and March was more than what I had planned for.  Can I increase my dependent care FSA now to cover those expenses?

  • Under the American Rescue Plan Act you can increase your dependent care FSA election to a maximum of $10,500 for the 2021 calendar year.  Please note that increases to your dependent care FSA can only be used for future expenses.  All changes are on a prospective basis. 

4.  Did the American Rescue Plan Act raise the maximum amount that I am allowed to contribute to my health care FSA?

  • No, the maximum for the health care FSA did not increase, it remains at $2750.

5. I’ve decided to enroll my children in summer camp.  Can I increase my dependent care FSA?

  • Yes, under the American Rescue Plan Act (ARPA) if you are currently participating in the dependent care FSA you can increase your dependent care FSA up to a maximum amount of $10, 500 for calendar year 2021.  You will need to complete an FSA Special Election form (HR-135a) to add the funds to your dependent care FSA.  The election will be effective the first of the month following receipt of the form by the Office of Benefit Services.   Please plan carefully and keep in mind that the increased amount can only be used on future expenses.

6. I have receipts for masks and hand sanitizer that I recently purchased.  Can I submit these for reimbursement through my health care FSA?

Yes, under the American Rescue Plan Act (ARPA) Personal Protective Equipment (PPE) is an eligible expense.  You can print and complete a claim form from the Optum site (www.optumbank.com/fcps), attached your receipts and send to Optum for reimbursement.