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The Office of Personnel Management (OPM) announced it has launched a Special Open Enrollment period for traditional health care FSAs, Limited Expense Health Care FSAs and Dependent Care FSAs until June 30.
In response to recent legislation (Consolidated Appropriations Act (CAA) and American Rescue Plan Act (ARPA) 2021) and IRS guidance, the Federal Flexible Spending Account Program (FSAFEDS) is providing a Special Enrollment Period (SEP) and new flexibilities for the 2020 and 2021 plan years to Health Care Flexible Spending Accounts (HCFSAs), Limited Expense Health Care Flexible Spending Accounts (LEX HCFSAs), and Dependent Care Flexible Spending Accounts (DCFSAs).
A health care FSA is a pre-tax benefit account that’s used to pay for eligible medical, dental, and vision care expenses that are not covered by a health care insurance plan. Federal employees who work for an executive branch agency or an agency that has adopted the Federal Flexible Benefits Plan (“FedFlex”) can elect to participate in FSAFEDS.
Permitted FSAFEDS Changes
OPM released a benefits administration letter (BAL) outlining the permitted FSAFEDS changes. Below are the highlights:
1. Current Healthcare Flexible Spending Account (HCFSA) and Limited Expense Healthcare Flexible Spending Account (LEX HCFSA) participants who are eligible may carry over unused contributions from plan year 2020 to 2021, and then again from plan year 2021 to 2022.
2. The grace period to incur DCFSA eligible expenses is extended to December 31 for plan year 2020 and 2021.
3. During a 30-day Special Enrollment Period (SEP) from June 1, 2021 – June 30, 2021 participants who elected an HCFSA or DCFSA for plan year 2021 will be allowed a one-time opportunity to make a change to their annual election amount.
FSAFEDS Reference Guide
FSAFEDS issued a reference guide outlining the details of the special enrollment period and the relief provided by CAA/ARPA. It also includes instructions on how to take advantage of the relief, along with several practical scenario examples.
- To download the FSAFEDS reference guide, click here.
- To download OPM’s BAL (21-802) “Flexibilities Allowed for the Federal Flexible Spending Account Program (FSAFEDS) During Plan Year 2020 and 2021”, click here.
For more information on FSAFEDS, visit https://www.fsafeds.com/