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New rules for tax-advantaged accounts in response to COVID-19

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Updated June 4, 2020

To provide relief for participants in UC’s Health Flexible Spending Account (FSA), the deadline for submitting claims for 2019 expenses has been extended. The new deadline depends on the end date of the COVID-19 National Emergency, which has not yet been determined. Despite the extended deadline, Health Flexible Spending Account (FSA) participants will be able to use their 2019 carry-over funds for 2020 expenses beginning June 5, 2020. Read New rules and processes for your Health FSA for details about how claims for 2019 and 2020 will be processed. 

Please note that the April 15 deadline for submitting Dependent Care FSA expenses has not been extended.

Read Important changes to UC benefits programs for relief during the pandemic to learn more about new rules giving employees and non-Medicare retirees flexibility to make changes to their group health plan coverage — including the option to change your Health FSA enrollment or contributions — and more time to complete certain transactions.

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The Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law as of March 27, 2020, contains important provisions that will affect Health Savings Accounts (HSAs), Health Reimbursement Accounts (HRAs) and Flexible Spending Accounts (FSAs). Also, under existing rules, certain changes in your situation may allow you to increase or decrease contributions, or enroll or disenroll from your FSA.

Under the CARES Act, the following are now eligible expenses for reimbursement through your HSA or FSA:   

  • Over-the-counter drugs and medicines without a doctor’s prescription
  • Menstrual care products (now considered a qualified medical expense); all expenses incurred after December 31, 2019, qualify, and the provision has no expiration date

UC’s HSA and FSA administrators are working to update their plan documents and websites to reflect these changes. Please note that you may not be able to use your HSA or FSA debit card to purchase these newly-qualified items until retailers have updated their systems. Remember to keep your receipts so you can submit claims for reimbursement.

Your FSA enrollments or contributions

If your spouse loses a job, and eligibility for the employer’s Health FSA plan, due to the pandemic, you may enroll in UC’s Health FSA or increase your contribution.

With schools and daycares closed and many people working from home, your dependent care expenses may have changed dramatically due to the COVID-19 pandemic. Here are examples of how this may affect your Dependent Care FSA enrollment or contributions:

  • If you are no longer able to send your child to daycare, or if you no longer need to do so because you are working from home, you are eligible to decrease your FSA election or stop participating in the plan.
  • If your child’s school closes and you need to enroll your child in daycare to allow you to continue to work, you are eligible to enroll in the Dependent Care FSA or increase your election.

Once you return to your usual work schedule and childcare expenses, you can once again make changes to your FSA elections – reducing or increasing your expenses, or enrolling or disenrolling in the plan.

You must request a change to your FSA within 30 days of your change in status (for example, the date your spouse became unemployed or your child stopped attending daycare).

If your dependent care expenses have decreased, you can reduce your contribution to the amount you’ve contributed year-to-date, giving you through the end of the year to use any funds remaining in your account. If you disenroll from your FSA, you may only be reimbursed for expenses from Jan. 1 (or your start date) through the date you stop participating – unless you enroll again promptly once your situation returns to normal.

Review the Dependent Care FSA Summary Plan Description or Health FSA Summary Plan Description for details about the FSA plans.

How to request a change

If you use UCPath to manage your benefits, complete the UCPath Health Benefits Enrollment Form for Life Event to change your FSA enrollment or contribution. Select “Other – Explain” as the qualifying life event, writing in “COVID-19.” To submit the form, go to “Ask UCPath Center” in the upper right of your UCPath dashboard, and select “Submit an Inquiry.” Provide the requested information, and add the completed form as an attachment.

If you use AYSO to manage your benefits, complete the UPAY 850 form and submit it to your Benefits Office.

Your HSA contributions

If you have an HSA, you can change your contribution for this year at any time, up to the IRS limit. To make the change, contact UCPath via secure message, or your Benefits Office if you are not at a UCPath location. Until April 15, 2020, you can also contact Health Equity to make additional contributions for 2019. 

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