Federal Employees Have a Limited Window to Make Mid-Year Changes to FSAFEDS Elections

July 1, 2020 4:00 PM , Updated July 9, 2020 6:26 PM
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Piece of paper labeled 'flexible spending account' lying on top of a spreadsheet next to a pen and reading glasses depicting planning for health care/health insurance expenses

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The Office of Personnel Management has announced a 60-day limited period where federal employees who participate in the Federal Flexible Spending Account Program (FSAFEDS) can make mid-year changes to their elections in the program.

The details of the situation were announced in a memo published today by OPM. The limited period begins on July 1, 2020 and ends 60 days from July 1, 2020. This ensures that enough time remains in the FSAFEDS plan year to appropriately effect mid-year election changes.

The changes are being allowed by the Internal Revenue Service as a result of the situation with the COVID-19 coronavirus. IRS Notice 2020-29 acknowledges that the circumstances surrounding COVID-19 have led to unanticipated changes in the need for medical care and dependent care.

OPM described the allowable mid-year changes to FSAFEDS elections as follows:

FSAFEDS Permitted Changes

Increase or Decrease Election in HCFSA, LEX HCFSA, and DCFSA

During the 60-day limited period, all participants who have enrolled in a 2020 Health Care Flexible Spending Account (HCFSA), Limited Expense Health Care Flexible Spending Account (LEX HCFSA), or Dependent Care Flexible Spending Account (DCFSA) will be allowed to make a one-time change (increase or decrease) in the amount of their annual election in each FSA account in which they are enrolled. In accordance with IRS guidance, the election change is effective prospectively, on the first pay period after approval by FSAFEDS. Accordingly, participants cannot receive a refund of allotments from pay they have already made to their FSA account(s) year-to-date. In addition, participants cannot decrease their election below the amount already allotted to the FSA account OR the amount already reimbursed for eligible expenses, whichever is greater.

Additional details are included in the memo from OPM. Federal employees with questions about their specific plans/situations should see their local human resources office for guidance.

60-Day Limited Period for Changes to Existing Elections Under the Federal Flexible Spending Account Program…

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Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce.

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