The most recent COVID relief package structured additional relief for people who the pandemic has financially affected. Besides the $600 checks, congress made changes to Flexible Spending Accounts (FSA) and Dependent Care Accounts (DCA). These changes are at the discretion of employers; they may adopt one or more of the adjustments included in the stimulus package but are under no obligation to do so. They all may make a significant difference to employees and their families who are struggling in COVID's wake.
If you’re interested in changing your employees’ FSA or DCA, meet with an experienced insurance consultant like Ashton Benefits for more information.
Flexible Spending Accounts allow employees to save pre-tax money for out-of-pocket medical expenses. These accounts usually abide by the “use-it-or-lose-it” rule. Unused savings in the account revert to the employer.
Dependent Care Accounts allow employees to set aside pre-tax money for child and elderly care for their dependents. People may contribute up to $5,000 to the account and use it to secure care for children under the age of 12 or another qualifying dependent who physically or mentally cannot self-care. Employees forfeit funds unused within the plan year.
Employers may opt to provide their employees with some important changes to the FSA and DCA. They are not mandatory changes. To implement one or more of these changes, you must amend the plan before the last day of the calendar year after the change occurs. For example, you must amend plans by December 31, 2022, for modifications implemented in 2021. These are the optional changes:
To take advantage of one or more of these changes, your FSA administrator must first release them. You have until the last day of the calendar year following the change to amend your employee benefits plan. If you have questions about how these changes benefit your employees or what they mean for your benefits package as a whole, meet with an insurance consultant like Ashton Benefits. We will offer not only insight and but ongoing updates regarding future changes.
You don’t have to navigate these critical changes to FSAs and DCAs alone. By meeting with an experienced insurance consultant, you get greater insight into what the proposed changes will mean for your business and your employees. At Ashton Benefits, we pair industry expertise with sophisticated technology to help employers build and maintain benefits packages that provide for their team.
If you’re interested in changing the FSA and DCA for your company’s benefits, reach out to our experienced team. You’ll not only access our insights into these changes but also our integrated online platform for all your HR needs.