Additional Relief For FSA Benefits

As part of the COVID-19 relief package passed by Congress earlier this week, which has not yet been signed into law by President Trump, the federal government expands on earlier relief issued by the Internal Revenue Service (IRS) for health and dependent care flexible spending account benefits (FSAs). Under these temporary rules, plan sponsors may give their employees additional time to use their FSA account balances and to make changes to their FSA elections. These changes are optional and require plan amendments.

Read below for more details about this relief, including the deadlines to make plan amendments.

No Limit on FSA Carryovers and New Dependent Care Carryover

As described in our earlier blog related to the IRS relief, FSAs generally are subject to a "use it or lose it" rule, pursuant to which employees must use their account balances for eligible expenses incurred during the plan year, subject to limited exceptions that allow a carryover of unused