
On Sunday, December 27, 2020, the White House signed into law the Consolidated Appropriations Act of 2021, a massive bill to fund the government that includes several provisions related to Cafeteria Plans, specifically flexible spending accounts (FSAs).
The bill provides temporary provisions that permit employers to offer increased flexibility surrounding rollover of funds from health care FSA and dependent care FSA plans to give members an opportunity to spend down funds or change their elections. Employers have until the last day of the calendar year following the plan year in which the amendment is effective to make amendments to their plan documents. For example, calendar year 2020 plan amendments must be adopted on or before December 31, 2021.
Below is a summary of the provisions in the bill that are currently proposed to health care and dependent care FSAs. Employers may choose to implement these provisions, but they are not required to do so. These are intended to offset financial and health hardships resulting from the continuation of the pandemic.
Employers and brokers should be aware of these provisions in the latest COVID-19 Relief Bill for 2021. If you have questions or concerns, please contact your account representative about how ConnectYourCare will support these changes. We also advise employers to speak with their tax or benefits counsel about the legislation. For more information about COVID-19 legislative updates and news, visit our Coronavirus (COVID-19) Resources for Employers and Partners page.