Employees may have questions about how recent events correlate with Flexible Spending Accounts (FSAs).
This communication will address some of the questions employees may have regarding these benefits.
DEPENDENT CARE FSA
At any time (not only in our current situation), if there is a unexpected change in child care location/situation (ie. daycare facility closes) and/or cost (ie. parent goes back to work – enrolling child in daycare), this does allow an employee to make changes to their Dependent Care Flexible Spending Account (DCFSA).
If the employee is now staying home with their child(ren) and the child(ren) are no longer in daycare, they may submit an Election Change Request within 30 days of the Qualifying Event: Change in Cost. The change will take place the 1st of the month on/following the receipt of the application.
This will also work vice versa. If the child(ren) should return to daycare, the employee may submit a new Election Change Request within 30 days of the Qualifying Event to reinstate/re-enroll in this benefit.
The Election Change Request may be completed electronically by the employee and submitted directly to FP&M Benefits.
Please note, this is not a required change; this is optional. If the employee(s) do not want to make a change; no action is needed.
MEDICAL FSA
At this time, there is not Qualifying Event in regards to the current events to enroll, change or cancel these contributions. The employee must have a standard Qualifying Event to make a change mid-year to the Medical FSA. If the employee is unsure of the Qualifying Events that are required, they may refer to the UW-System: Life Events Website.
YEAR-TO-DATE CONTRIBUTIONS
Unfortunately, at this time; we have not received further guidance on whether or not FSA (either Medical or Dependent Care) contributions would be eligible for rollover in 2021; more than the IRS guidelines currently allow. A change such as this is determine by the vendor, IRS guideline changes and the duration of the current events. We will continue to monitor the situation and work with UW-Shared Services and Connect Your Care (CYC) to determine any changes that may occur.
At this time, the current guidelines are still in effect and FSA contributions (with the exception of the standard $500 Medical FSA rollover) must be used prior to end of day 12/31/2020 or in cases of termination prior to 12/31/2020 – the last day of the month in which the last deduction occurred. To use the funds past a termination date (ie. last contribution), the employee would need to contribute the remaining balance of the annual election; which would allow the account to remain active (although no longer employed at UW) through the remainder of 2020.
Again, we will continue to monitor the current events and update you on any changes and/or allowances that may occur to these accounts.
Please contact FP&M Benefits if you have any questions (benefits@fpm.wisc.edu).