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The IRS recently issued Notice 2021-15 to provide guidance on certain
provisions of the Consolidated Appropriations Act of 2020 (the CAA ) affecting the administration of flexible spending
accounts ( FSAs ). The CAA changes are intended to
address the reality that many participants were not able to incur a
sufficient amount of health care or dependent care expenses in 2020
to zero out their FSAs by the end of the 2020 plan year, and
provides various alternatives to allow participants to access those
funds. The changes described in this Client Alert are
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The IRS recently issued Notice 2021-15 to provide guidance on certain provisions of the Consolidated Appropriations Act of 2020 (the CAA ) affecting the administration of flexible spending accounts ( FSAs ). The CAA changes are intended to address the reality that many participants were not able to incur a sufficient amount of health care or dependent care expenses in 2020 to zero out their FSAs by the end of the 2020 plan year, and provides various alternatives to allow participants to access those funds. The changes described in this Client Alert are discretionary and not mandatory; employers may choose to adopt some, all or none of them.
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