On December 27, 2020, the President signed the COVID-19 Relief Bill, which allows for changes to flexible spending accounts. We expect federal agencies to provide further guidance on these changes and we will provide updates as more information is available. Below is a summary of the applicable provisions of the bill. PEBA is working to provide relief to eligible members as quickly as possible and will update publications accordingly soon.
- Increases the MSA and Limited-use MSA carryover for 2020 and 2021 to the full unused amount.
- Extends the DCSA grace period for 2020 and 2021 to December 31 of each following year.
- Increases the age limit for DCSA-eligible dependents to age 13 for 2020 DCSA participants with unused 2020 funds who had a dependent who turned age 13 during 2020.
- Allows for certain prospective changes during the 2021 plan year. Based on the provisions in this bill, PEBA is allowing employees to make prospective changes to MSAs, Limited-use MSAs and DCSAs without a qualifying change in status in 2021. Employees can make changes to their flexible spending accounts for plan year 2021. Changes can be made anytime during 2021, but no later than November 30, 2021, by submitting an Active Notice of Election (NOE) form. A change will be effective the first of the month following PEBA receiving a completed NOE.
View the COVID-19 Relief Bill summary for FSAs in 2021 document for more details about the changes.