The Coronavirus Aid, Relief, and Economic Security (CARES) Act and IRS Notice 2020-29 allow for the following changes to TexFlexSM flexible spending accounts (FSAs). Please note that most changes apply only to FSAs, but one also applies to health savings accounts (HSAs):
FSA payment or reimbursement for over-the-counter (OTC) drugs and medicines no longer requires a doctor’s prescription. This means that participants in a health care FSA can now use the benefit to pay for OTC items like cold medicine, allergy medicine and pain relievers, without having to make an extra trip to the doctor for a prescription. This new guideline is effective immediately and is retroactive to January 1, 2020.
Menstrual care products can now be paid for or reimbursed through an FSA, HSA or health reimbursement account (HRA). This will allow participants in a health care FSA, HSA or HRA to use their benefit to pay for menstrual care products. These are now considered qualified expenses. This new guideline is effective immediately and is retroactive to January 1, 2020. (Please note: The Texas Employees Group Benefits Program does not offer HRAs.)
In health care and limited-purpose FSAs, the carryover amount will increase to a maximum of $550 in Plan Year 2021 (ending August 31, 2021). The carryover amount for the current plan year (ending August 31, 2020) remains up to $500. The carryover is automatic and only applies to the health care and limited-purpose FSAs. The carryover amount increases to $550 for Plan Year 2021.
FSA participants can make changes to their Plan Year 2020 FSA elections without a qualifying life event (QLE), including decreasing contributions or ending enrollment through August 31, 2020. Participants should contact their Benefits Coordinator if they want to enroll in, increase or decrease contributions, or end their FSA.
Health care, limited-purpose and/or dependent care FSA participants have an extended amount of time to use their Plan Year 2020 funds to pay for eligible expenses. Participants can submit claims through December 31, 2020 for eligible expenses incurred through December 31, 2020.
- If a health care or limited-purpose FSA participant ends participation in the FSA before the end of Plan Year 2020 (August 31, 2020), the participant still can use their remaining funds to pay for eligible expenses incurred through December 31, 2020, as long as they remain an active employee. All claims must be submitted by December 31, 2020.
- A dependent care FSA participant can use any remaining funds they have contributed through December 31, 2020 even if they terminate employment.
For more information, please contact TexFlex Customer Care toll-free at (844) 884-2364 (TTY: 711), Monday-Friday, 7 a.m. – 7 p.m. CT.
Source: ERS News About Your Benefits (July 2020)