Gulfshore Insurance > Gulfshore Blog > COVID-19 > Client Alert: IRS Provides More Options for Unused Funds in Health FSAs and DCAPs

IRS Provides More options for Unused Funds

The IRS recently announced more options with respect to unused amounts in health flexible spending accounts (FSAs) and dependent care assistance programs (DCAPs). These options allow employers to permit:

  • An extended period for incurring health FSA or DCAP expenses; and
  • Health FSA carryovers of up to $550.

 

Extended Period
Due to the COVID-19 outbreak, employees may be more likely to have unused amounts in their health FSAs or DCAPs. IRS Notice 2020-29 allows employers to permit employees to apply unused amounts remaining in a health FSA or a DCAP at the end of a plan year ending in 2020 (or a grace period ending in 2020) to pay or reimburse expenses incurred through Dec. 31, 2020. This relief applies to all health FSAs, including health FSAs that allow carryovers.

Click here to download the legal update

We will continue to share information as it becomes available and keep you informed.

Ryan Laude is a Client Advisor at Gulfshore Insurance specializing in employee benefits. Ryan works with a wide range of businesses to create the best funding options that fit their needs. Comments and questions are welcome at rlaude@gulfshoreinsurance.com