New FSA rules in response to COVID-19
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020, contains important provisions that affect Flexible Spending Accounts (FSAs).
In addition, under existing rules, certain changes in your situation—called “qualifying life events”—may allow you to increase or decrease contributions or enroll or disenroll from your FSAs. For example, if your spouse loses a job due to the COVID-19 pandemic, or any other reason, and can no longer participate in their employer’s FSA plan, you can enroll in King County’s Health Care and Day Care FSAs or increase your contributions using the FSA Change Form.
Your Health Care FSA
Under the CARES Act, you can now use your Health Care FSA to pay for or receive reimbursement for:
- Over-the-counter drugs and medicines without a doctor’s prescription.
- Menstrual care products, which are now considered a qualified medical expense. All expenses incurred after Dec. 31, 2019, qualify, and the provision has no expiration date.
Your Dependent Day Care FSA
If you have a Dependent Day Care FSA, you can reduce or cancel your contributions due to the current situation with school and day care closures. If you want to make changes to your Day Care FSA, please contact The Benefits Team.
The following scenarios have arisen due to the COVID-19 pandemic that may affect your Day Care FSA:
- Your child’s day care closes, causing a loss of care and care expenses, and resulting in a significant reduction of your annual cost of care. Because your care expenses have decreased, you may decrease your FSA election or stop participating in the plan.
- You are now working from home and can keep your children home instead of using day care, resulting in a significant reduction of your annual cost of care. Because your care expenses have decreased, you may decrease your FSA election or stop participating in the plan.
- Your child’s school closed and you need to enroll your child in day care to allow you to continue to work. This new care expense allows you to enroll or increase your current FSA election.
Keep in mind, you must request the FSA change within 30 days of the status change event.
If you opt to stop participating in the plan, contributions already made will not be refunded, however, you may use your FSA to get reimbursed for expenses incurred between Jan. 1 (or your start date) and the date you stop participating.
It may be safer to reduce your annual contribution to the amount you’ve already contributed year-to-date. This means you can use the funds you’ve already contributed for expenses incurred through the end of the year.
Once our usual day-to-day operations resume, you can again make changes to your Day Care FSA elections—reducing or increasing your expenses or enrolling or disenrolling in the plan, within 30 days of the status change event.
For more information or to request a change to your FSA, please contact the King County Benefits Team at KC Benefits or 206-684-1556.