COVID-19 Pandemic: Dependent Care FSA Update

The Consolidated Appropriations Act of 2021 (CAA), which was signed into law on December 27, 2020, included a variety of changes affecting group health plans, cafeteria plans, and retirement plans. The University has adopted the optional changes that affect the dependent care flexible spending account (FSA).

Prior to the passing of the CAA, many University employees had reached out to the Office of Human Resources in regard to their flexible spending accounts (FSA)--most notably, the dependent care FSA. Dependent Care FSAs are used for several reasons, including child care and summer camps, most of which were closed or cancelled beginning in March 2020 due to COVID-19. Monies in the accounts for those who have elected the dependent care FSA were essentially frozen and could not be used. As flexible spending accounts are highly regulated by the federal government, the University was unable to make unilateral changes; while the University could permit employees to stop future deferrals, it could not facilitate a return of any funds remaining in the accounts.

The passing of the CAA has provided the University and other employers the ability to provide relief to those with dependent care FSAs.

Changes to Dependent Care Flexible Spending Accounts

The optional changes that the University adopted with regard to the dependent care FSA include:

  • Unused amounts at year-end are generally forfeited by employees and not carried over to a later year. Under the CAA, there is a temporary ability to carryover unused amounts for dependent care FSAs from the plan year ended in June 30, 2020 (FY 20) to the current plan year ending June 30, 2021.
  • In addition, there is a temporary ability to carryover unused amounts for dependent care FSAs for the plan year ending June 30, 2021 into the plan year beginning July 1, 2021. As the new plan year approaches, please plan accordingly during open enrollment.
  • The CAA extends the maximum age limit for dependents to be eligible for dependent care FSA reimbursements from age 13 to age 14 for the 2020 and 2021 plan years. This limit also is available for unused amounts carried over from the 2019-2020 year to the 2020-2021 plan year. This special age limit relief rule does not permit reimbursement for expenses for a child who is age 14 years or older. Eligibility for the account and reimbursement will end the month the child turns 14.

Making Changes to Your Dependent Care FSA Elections

Those affected by these changes to the dependent care FSA will be notified directly by UPMC Benefit Management Services through a letter sent via U.S. mail. This letter outlines the changes to how and when funds in the dependent care FSA can be used as well as a summary of claims made from July 1, 2019 through January 21, 2021.

If you want to make a change to your dependent care FSA elections, please contact the OHR Benefits Department by submitting an inquiry online or by calling 833-852-2210. Changes must be submitted no later than May 31, 2021 to be accepted and processed for this plan year (FY 21). No election changes will be accepted after May 31, 2021.

For Additional Questions

If you have additional questions, please contact the OHR Benefits Department by submitting an online inquiry or by calling 833-852-2210. You can also contact UPMC Benefit Management Services by calling 1-800-499-6885 or by emailing consumeradvantage@upmc.edu.