Flexible Spending Account Updates
Posted in Announcements
Effective March 15, 2021
Updated April 26, 2021
The Consolidated Appropriations Act, 2021 (CAA) and the American Rescue Plan Act, 2021 (ARPA) allows employers to adopt temporary provisions for health care and dependent care Flexible Spending Account (FSA) plans in order to provide relief to employees during the COVID-19 pandemic.
Effective March 15, 2021, Georgetown University adopted the following provisions:
- Extension of grace period to December 31 for FSA participants to incur and submit expenses for reimbursement. This will apply to 2020 and 2021 plan years.
- Flexibility to change Health or Dependent Care FSA contribution amounts during 2021 for any reason. Changes may be requested in GMS and will take effect on the date that you submit the change but may take up to 2-3 weeks to be reflected in your FSA with ConnectYourCare. Election changes are prospective only and may be requested through December 1, 2021.*
- Participants with a remaining 2020 Dependent Care FSA balance, may claim expenses through the extended grace period (December 31, 2021) for dependents up to age 14.
Effective April 26, 2021, Georgetown University has adopted the following provision of the ARPA:
- The maximum annual contribution to the Dependent Care FSA for 2021 is $10,500 per household.
*Additionally, further guidance from the IRS has clarified that, in fact, for those who are electing or increasing their FSA balance for 2021, although the annual election will be collected prospectively over the remaining pay periods of the year, the claims for which you reimburse yourself may be incurred back to either 1) January 1, 2021 or, if you were hired after that date, 2) the date of hire.
Please use these step-by-step instructions for Requesting COVID-19 FSA Changes in GMS.
Frequently Asked Questions
No. Under the new adopted provisions, you have until December 31, 2021 to incur expenses and submit for reimbursement against your unused FSA balance from 2020. If you have elected an FSA in 2021, you’ll have until December 31, 2022 to incur and submit eligible expenses against your 2021 account balance.
How does the extension of the Health FSA grace period affect my ability to participate in a Health Savings Account (HSA)?
If you had a balance remaining in your 2020 Health FSA on January 1, 2021, and you are enrolled in a high deductible health plan (CareFirst CDHP or Kaiser HDHP), you will not be eligible to contribute to an HSA during 2021. You can, however, choose to increase your 2021 Health FSA contribution to a maximum of $2,750.00 in order to help manage cash flow and deductibles.
If you intend to contribute to an HSA in 2022, you must have a $0.00 balance in your 2021 Health FSA on December 31, 2021.
Approved changes will take effect as of the date you request it in GMS. However, it’s important to note that the changes may not be reflected in your ConnectYourCare FSA for up to 2-3 weeks. While waiting for these changes to be reflected in your account, save your receipts. You can submit them once ConnectYourCare has updated your account.
This means that you can only make changes to your annual election going forward. If you are reducing or stopping your annual election, you cannot be reimbursed for any pre-tax contributions that have already been directed to your FSA. If you are increasing your annual FSA election, the increase will be collected from your remaining pay over the remainder of the year.
If I am increasing my Health or Dependent Care FSA contribution starting on July 1, can I submit for reimbursement for expenses that I incurred in January?
Yes, you can submit claims from January against increased balance as long as you were an eligible Georgetown employee on January 1, 2021.
I was hired in February and increased my FSA election in March, and can I submit for reimbursement against claims incurred on January 1?
No, you can only submit for reimbursement against claims incurred on or after your date of hire.
If I want to decrease my annual FSA contribution, and I haven’t yet submitted any reimbursements against my current FSA balance, can I be refunded for those contributions that I have already made this year?
No. The IRS prohibits refunds of pre-tax contributions once they have been deposited into your FSA account. The decrease is effective the first day of the month following your change request.
If you request to decrease or stop future FSA contributions, a benefit team member will have to validate that you have no outstanding FSA claims that would impact the change. It could take 3-5 days to complete the review process. You will be notified if we are unable to process your request.
COVID-19 FSA change requests are limited to once a month. If you have a qualifying life event, such as the birth of a child, divorce, marriage, you can make eligible changes to your FSA and other benefits within 30 days of that event. Those changes must also be requested in GMS. COVID-19 FSA change requests will no longer be accepted after December 1, 2021.
Yes, you have until December 1, 2021 to request changes to your FSA under the CAA provisions. COVID-19 FSA change requests will not be accepted after that date.
It can take up to 3 weeks to process your enrollment and produce your new card. It will be sent to your home address as soon as it’s ready. Please take a moment to confirm in GMS that your home address is correct.
I have a balance in my 2020 Dependent Care FSA. However, my child has turned 13 and is no longer “eligible” for child care expense reimbursement. What can I do?
During the extended grace period for 2020 Dependent Care FSAs (through December 31, 2021), you may claim expenses for your dependent up to age 14.
No, not exactly. For changes that are due to a life event (birth, marriage, divorce, child care change), you may request an FSA change as long as it is related to the life event. You must make the request in GMS within 30 days of the event, provide supporting documentation, and the FSA change will take effect retroactively to that date.
For COVID-19 FSA change requests, the date you submit the change is the date that your change will take effect (some exceptions could apply). Supporting documentation is not required.