The Consolidated Appropriations Act 2021 (COVID-19 Stimulus Relief Bill) was signed into law on December 27, 2020.

The bill includes several provisions to provide relief for health care and

dependent care flexible spending accounts (FSAs).

Under these provisions, employers are allowed, but not required, to amend their Section 125 Cafeteria Plan.

The USG has adopted the following provisions:

1. Grace Period extension for HCFSA and DCFSA

The normal grace period is through March 31 of the next year – for this year, it is December 31, 2021 for the 2020 plan year.

2. Election Amount Changes for HCFSA and DCFSA

Employees will be allowed to make amount changes for any reason through December 31, 2021.

3. Maximum age increase (DCFSA):

Employees will be able to claim expenses for dependents who turned 13 during 2020. Current plan rules provide coverage for qualified expenses of dependents who are younger than age 13.

This would apply to the 2020 DCFSA grace period. Employees would be able to submit claims through 12/31/21.

For example, if an employee had a 2020 DCFSA account and had a dependent who turned 13 in March 2020, under this provision they would be allowed to claim expenses incurred up through 12/31/2021, if USG elects to extend the 2020 grace period.