Temporary FSA Election Relief

If you weren’t counting on a pandemic when you made your most recent Health or Dependent Care FSA election, you are certainly not alone. Fortunately the IRS is offering some flexibility with election changes during 2020.

Your Health and Dependent Care FSA salary reduction elections are generally irrevocable and can only be changed during the plan year as a result of a qualifying life event. However, because of the disruption caused by the COVID-19 pandemic, during the 2020 calendar year your plan may adopt an amendment to allow you to increase or decrease your Health or Dependent Care FSA salary reduction election even if you do not experience a qualifying life event. Any change must be prospective, and you cannot decrease your election below the amount you have already contributed or the amount you have already been reimbursed for expenses, whichever is higher.

This is temporary relief for the 2020 calendar year only. After 2020, you will not be permitted to make election changes without a qualifying life event. If your plan did not adopt this amendment, the standard election change rules apply. If you have questions about this change, please contact us.