Sam Slade
Two recent pieces of pandemic relief legislation intended to provide employees with financial relief from the effects of COVID-19 offer employers additional flexibility to make changes to dependent care flexible spending accounts (FSA). Employers should decide whether and to what extent they wish to amend their plans to incorporate these changes and communicate the new options to employees quickly to allow employees to realize the greatest benefit.
Changes Under the Consolidated Appropriations Act
The Consolidated Appropriations Act, which was signed on December 27, 2020, added a few optional special rules for dependent care FSAs (DCFSA), including permitting employers to:
• Carryover unused amounts from the 2020 plan year to the 2021 plan year, and from the 2021 plan year to the 2022 plan year;