HR, Payroll and Benefits News

Mid-Year Changes: Healthcare FSA and Dependent Day Care Accounts

Due to the COVID-19 pandemic, the Group Insurance Board recently approved the following flexibility granted by the IRS for Healthcare FSAs and Dependent Day Care Accounts.

Healthcare FSAs

    • Increase annual carryover limit to $1,000 (from $550) from plan year 2020 to plan year 2021
    • Add personal protective equipment such as masks, hand sanitizer and sanitizing wipes as eligible expenses retroactive to January 1, 2021

Dependent Day Care Accounts

    • Increase age limit for qualifying dependent child(ren) to under age 14 (for 2021)
    • Add an annual carryover limit of up to $2,500 from plan year 2020 to plan year 2021
    • Increase annual contribution limit to up to $10,500 for individuals or married couples filing jointly and $5,250 for married couples filing separately (for 2021)
    • Allow a one-time opportunity from June 1- June 30 for current participants to increase their annual contribution, without a qualifying life event.

One-time Opportunity to Increase Dependent Day Care Account Contributions: Submit a completed Election Change Request Form. Your change will be effective the first of the month following receipt of your form.

      • Submit your completed form on or before June 1 to be effective June 1
      • Submit your completed form June 2 - June 30 to be effective July 1
    • Submit your completed form after June 30 and your change will be denied. Your next opportunity to make a change without a qualifying life event will be during the Annual Benefits Enrollment period in the fall.

Note: The increased dependent day care account amount may be used for eligible expense(s) incurred on/after January 1, 2021, even those that occurred prior to your new election.

Healthcare and Dependent Day Care Account Carryover from 2020 to 2021: No action is necessary on your part to receive the additional healthcare carryover and/or the dependent day care account carryover. If you have funds that are eligible to be carried over, the funds will automatically be applied to your account mid-June.

Questions: For questions about your flexible spending account, contact Optum Financial/ConnectYourCare at 833-881-8158.

For questions on submitting a dependent care change form or your flexible spending account payroll deductions, contact your institution’s benefits office.

Source: UW System Human Resources