Flexible Spending Accounts (FSAs)

Flexible Spending Account(s)

 

As you may know, new COVID relief legislation was recently released allowing organizations to offer more options with regards to the Flexible Spending Accounts for 2020 and 2021. I am pleased to share that Wellesley College has chosen to adopt the following changes to allow eligible employees more flexibility with respect to their Flexible Spending Account (FSA) and/or Dependent Care Flexible Spending Account options.

 
All unused funds from your 2020 Medical FSA, Limited Purpose FSA and/or Dependent Care FSA will carry over into 2021 even if you did not re-enroll for 2021.
 
For the 2021 plan year, you may make an election change (enroll, drop or change your election amount) of the Medical FSA, Limited Purpose FSA and/or Dependent Care FSA without a qualifying life event (QLE). You have until July 31, 2021 to make a change. Only a single change to each FSA is permissible. Elections cannot be reduced to an amount less than your year-to-date contributions or reimbursements. After July 31, 2021, you may make an election change only if you experience a QLE.
  • In order to make a change, please follow these Workday steps above.   
On March 26, 2021, the IRS announced that the cost of certain personal protective equipment (PPE) to prevent the spread of COVID-19 is a medical expense under the tax code. Eligible PPE includes masks, hand sanitizer and sanitizing wipes purchased for the primary purpose of preventing the spread of COVID-19. These amounts can be reimbursed by your Medical FSA, or a Health Savings Account (HSA).
 
Coverage of PPE is not yet available on the debit card. Our recommendation is for employees to use "Over the counter healthcare products (eligible)" as the option for submitting for PPE, along with their itemized receipt.
  • Face Masks are eligible
    • Gaiters and Face Shields are not eligible.
    • Masks with vents and valves are not eligible
  • Gloves still require an LMN as they are dual purpose
  • Only Hand Sanitizer and Hand Sanitizing Wipes are eligible
    • Sanitizing Wipes for surfaces are not eligible (i.e. Clorox Wipes & Lysol Wipes
The new American Rescue Plan Act of 2021 (ARPA) increases the amount that may be elected for the Dependent Care FSA on a tax-free basis for calendar year 2021 from $5,000 to $10,500 (or from $2,500 to $5,250 for individuals that are married but filing separately).
 
  • Changes to your election amount must be made in Workday prior to July 31, 2021. Workday Instructions can be found above.  

  • Under the tax code, Dependent Care FSAs are subject to a nondiscrimination testing requirements.  If the Dependent Care FSAs fail this test, we may need to reduce the elections made by highly compensated employees to bring the Dependent Care FSAs into compliance. 

If you had a qualifying dependent who turned (or will turn) 13 during the 2020 or 2021 plan years, you may be able to use any unused funds in your Dependent Care FSA from those plan years for qualifying expenses for that child until they turn 14. This applies to employees who were participants in the Dependent Care FSA as of January 1, 2020.
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There are several available options to manage your account with WageWorks/Health Equity, file a claim or ask questions:

Online Account – For first-time users, please register for online access.

Mobile App – View your account on your mobile phone, take a picture of your receipt, and file your claim. (Your account must first be activated/set-up prior to using the Mobile App)

Phone – 877-924-3967 or use the Live Chat function within your online account.

 

What is an FSA? Review the FSA Brainshark video to understand your FSA Accounts.

  • IRS Account Limits for 2020 & 2021: Current limits are $2,750 for healthcare FSA and $5,000 for the dependent care FSA

Flexible Spending Accounts (FSAs) allow you to set aside tax-free dollars to pay for predictable health care and dependent care expenses. The College offers two accounts:

 

 

Because the IRS governs these accounts, you must make a new election each year if you want to participate. You are also required to use your account balance by the end of the calendar year or you will lose the remaining balance.

 

To contact WageWorks, go to www.WageWorks.com or call 1-877-924-3967.