OPM Releases Flexibilities Related to FSAFEDS
The Office of Personnel Management (OPM) is making changes to the Federal Flexible Spending Account Program (FSAFEDS) based on provisions in the FY 2021 Consolidated Appropriations Act (CAA) and the American Rescue Plan Act (ARPA), as well as Internal Revenue Service (IRS) Notice 2021-15.
A Flexible Spending Account, or FSA, is an employee benefit program that allows an employee to set aside money, on a pre-tax basis, for certain health care and dependent care expenses.
According to an OPM communication, OPM will allow flexibilities permitted under the CAA/ARPA, including allowing full carryover for a health care flexible spending account (HCFSA) and Limited Expense FSA (LEX FSA); extending the grace period for a dependent care flexible spending account (DCFSA); and permitting care for dependents through age 14 for 2020 and 2021 under a DCFSA.
OPM is working with FSAFEDS contractor Health Equity to offer a Special Enrollment/Election Period (SEP) in the near future. This SEP will allow participants to increase or decrease their current elections for their DCFSA and/or their HCFSA. In addition, the SEP will give those who did not re-enroll for 2021 during Open Season in the fall the opportunity to enroll in a DCFSA and/or HCFSA for 2021.
Finally, OPM will allow DCFSA participants to increase their election during the Special Election Period to the new IRS maximum of $10,500 for 2021. Federal employees should talk to their agency benefits specialists with further questions.
