Important Updates Regarding Flexible Spending Accounts

Due to the COVID-19 situation, if you have a flexible spending account (FSA) for the 2020 and/or 2021 plan years, please note the following important updates and options.

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2020 FSA Plan Year Updates

The following updates only apply to those with a 2020 plan year health care FSA and/or dependent care FSA.

Updates to Health Care FSA

Deadline Extended: The deadline to incur and submit receipts for 2020 plan year health care FSAs has been extended to June 30, 2021. This means you have until June 30, 2021 to use your 2020 plan year funds on eligible expenses and submit receipts. Initially, the deadlines for the 2020 plan year were March 15, 2021 to incur expenses and April 30,2021 to submit receipts.

Updates to Dependent Care FSA

Deadline Extended: The deadline to incur and submit receipts for 2020 plan year dependent care FSAs has been extended to August 31, 2021. This means you have until August 31, 2021 to use your funds on eligible expenses and submit receipts. Initially, the deadlines for the 2020 plan year were March 15, 2021 to incur expenses and April 30,2021 to submit receipts.

This deadline was extended to August 31, 2021 to give employees the ability to use the dependent care expenses they intended to use for Summer 2020 in Summer 2021 instead. We understand that some parents only set aside dependent care funds for summer care and do not use those funds during the school year. We wanted to ensure those parents had the opportunity to utilize funds intended for summer care.

Age Limit Increased: For your 2020 plan year dependent care funds only, you may now submit qualifying expenses for children age 14 and under. Normally, the IRS limits the reimbursement of qualifying dependent care expenses to children age 13 and under.

2021 FSA Plan Year Options

The following options only apply to those with a 2021 plan year health care FSA and/or dependent care FSA.

Modifications to 2021 FSA Contribution Amounts Permitted

When you sign up for an FSA, you determine the amount you want to contribute for the entire plan year. This amount is divided over each pay period and is deducted from your paycheck. You have the option to modify your FSA contribution amount for the remainder of the plan year with changes effective the 1st of the following month from date of your request.

The following limitations apply:

  • You may not decrease your plan year contribution amount to below what you’ve already contributed year-to-date (YTD) to your FSA. While you have the option to decrease your FSA contribution amount, the IRS does not permit refunds for money that has already been added to your FSA funds via your paycheck deductions. For example, if you elected to contribute $1,200 for the entire year to your FSA and you’ve already contributed $100 through your paycheck deductions, you may not decrease your FSA contribution amount for the entire plan year to below $100 since the IRS does not allow to refund money already added to an FSA fund.
  • You may not decrease your plan year contribution amount to below any expenses you’ve already incurred. For example, if you elected to contribute $1,200 for the entire plan year to your FSA and you’ve contributed $100 through your paycheck deductions so far but incurred $500 worth of eligible expenses, you may not decrease your FSA plan year contribution amount to below $500.
  • You may not increase your contribution amount beyond the IRS maximum dollar limitations. Find the annual maximum contribution limits here.
  • This only applies to 2021 FSA contribution amounts. You may not make modifications to your 2020 FSA plan year contribution amounts.

Life Event

If you have a qualifying event (e.g., marriage, divorce, death, birth/adoption, change in employment, or change in dependent care), the adjustment in your contribution amount must be consistent with the change of in status (e.g., if your employment status is reduced then so would the amount of money you put into your account). Changes related to a life event must be made within 30 days and take effect 1st of the following month.

Please note, this is not part of the Consolidated Appropriations Act implemented by the federal government to assist during the COVID-19 emergency, but it is another option available to employees.

How to Modify 2021 FSA Contribution Amounts

Please read the above information and limitations regarding modifications to 2021 plan year FSA contribution amounts prior to making any changes.

Directions to Add, Increase or Cancel Your FSA

The following instructions may be used to add, increase or cancel your Health Care or Dependent Care FSA. These changes are effective on the 1st of the following month.

  1. Log into the EBS Portal using your MSU NetID and password.
  2. Select My Benefits from the top navigation
  3. Click on Benefit/Retirement
  4. Select Enrollment and Changes due to the National Emergency from the drop-down menu.
  5. Click the Next button on the bottom-right of the page.
  6. Make necessary changes.
  7. Click Save.

Directions to Decrease Your Health Care FSA

The following instructions may be used to decrease the contribution amount of your Health Care FSA. 

  1. Complete the   Offline Enrollment/Change Form .
  2. Select “Other” as the reason for completing the form and write “National Emergency” in the text field. Changes submitted take effect 1st of the following month.
  3. In the "Event Date" box, enter the date of the event or 1st of the next month if completing under the National Emergency.
  4. Sign and submit the form to MSU HR (see instructions on the form for further submission details). If submitting the form based on a life event, you must submit the form within 30 days of the event.

Directions to Decrease Your Dependent Care FSA

The following instructions may be used to decrease the contribution amount of your Dependent Care FSA.

  1. Complete the  Offline Enrollment/Change Form .
  2. Select "Change in Childcare" as the reason for completing the form if completing due to a change in daycare enrollment, cost, etc. The other option is to use the National Emergency by selecting ‘Other’ and write “National Emergency” in the text field. Changes submitted take effect 1st of the following month.
  3. In the "Event Date" box, enter the date in which you were notified of the change or the date in which the change occurred when completing due to a change in childcare or 1st of the next month if completing under the National Emergency.
  4. Sign and submit the form to MSU HR (see instructions on the form for further submission details). If submitting the form based on a life event, you must submit the form within 30 days of the event.

If you have specific questions or concerns related to a form already submitted, please email AVPHR.Benefit.Admin1@msu.edu

2020 & 2021 Plan Year Updates

Expanded eligibility list for Health Care FSAs: If you have a Health Care FSA for the 2020 or 2021 plan year, the IRS has expanded the list of eligible items you can use these funds on. This includes items such as over-the-counter drugs without a doctor’s prescription. Review the full list of eligible items on the HealthEquity/WageWorks website and don’t forget to visit the FSA Store.

How to Submit Claims

There are several options to help you manage your FSA and submit claims. You can download the WageWorks EZ Receipts app to submit claims directly from your phone, access your account on the HealthEquity/WageWorks website, or submit a claim via fax or mail using the Health Care FSA Reimbursement Form or Dependent Care FSA Reimbursement Form.

Contact Information for Questions

Contact HealthEquity/WageWorks at 877-924-3967 with any questions regarding these FSA updates.