New flexibility for health FSAs, dependent care assistance

February 22, 2021

The IRS is now providing more flexibility, due to the COVID-19 pandemic, to employee benefit plans offering health flexible spending arrangements (FSAs) or dependent care assistance programs.

Under the Taxpayer Certainty and Disaster Tax Relief Act of 2020, these plans now have additional discretion in 2021 and 2022 to adjust their programs to help employees better meet the unanticipated consequences of the public health emergency.

Notice 2021-15 responds to unanticipated changes in the availability of certain medical care and dependent care. The notice provides flexibility in several areas and allows certain mid-year election changes for health FSAs and dependent care assistance programs for plan years ending in 2021. Learn more.

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