COVID-Relief FSA Rules Provide Longer Periods to Spend Unused Balances
Posted On February 16, 2022
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Rules signed into law in late 2020 under the COVID-Related Tax Relief Act of 2020 provide financial relief and flexibility to employees who participate in medical and/or dependent care flexible spending accounts (FSAs). As a result of the rules, MCPS adopted the following—
- Grace periods for spending unused account balances were extended. Employees who have unused medical or dependent care FSA funds from the 2021 calendar year will have until December 31, 2022, to incur claims and spend those remaining funds.
- Grace periods for terminated or retired MCPS employees who participated in a medical FSA while employed with MCPS. Medical FSA participants who terminated employment or retired from MCPS in 2021 can spend their unused account balances on expenses incurred through 2022.
- Employees do not need to have experienced a qualifying life event to make changes to their FSA account elections during the 2022 calendar year. This means you may enroll in an FSA, change your contribution amount (up to maximum allowed but not less than the amount already contributed), or cancel your participation for any reason, during 2022. These changes must be made by submitting MCPS Form 450-3, Flexible Spending Account Calendar Year 2022 Election.
To download a claim form and review your 2021 FSA account, visit the Benefit Strategies website. For additional information about FSAs, visit our website.