In these uncertain times, we are finding that participants are using their pre-tax benefits as a way to optimize savings and maximize allowable expenses. This situation is difficult to navigate, so we have brief updates below to keep you informed. Read on for information on regulatory changes, COVID-19 updates, and other considerations.

Please note: We’re monitoring the situation and updating as quickly as possible, but this post may not contain the latest information. Please review the CDC, DOL, and WHO websites for the most up-to-date information. The information in this post is for educational purposes only.

Repeal of OTC Prescription Requirement / Menstrual Products Now Eligible for Reimbursement

COVID-19 Testing Expenses

Status Changes for Flexible Spending Accounts

Dependent Care Accounts:

The purpose of the Dependent Care Account is to enable employees (and their spouses) to work, apply for jobs, or go to school.  Currently, many daycare centers/schools are closed, summer programs are closing or reducing hours, or parents do not feel comfortable sending their child to a daycare or summer camp.  In these instances, participants may change their election amount or stop contributing altogether per the IRS allowable event of a ‘change in the cost or coverage of the care.’  For eligibility, please keep in mind the following:

Health Care & Limited Purpose Accounts:

Unfortunately, some companies have needed to lay off or furlough employees.  If that is the case for your organization, keep in mind the following regarding the allowable status changes that may be made to a Health Care or Limited Purpose Account:

Transportation Account Changes

Unlike the Flexible Spending Accounts, participants may make changes to or stop/start contributing to parking and/or mass transit accounts at any time.  Now that many employees are working from home and mass transit services are operating with reduced or no schedules, it is an ideal time for employees to make changes so contributions do not become unused by the employee. In that case, consider the following:

Health Savings Accounts

In addition for participants to use HSA funds for all eligible OTC items, the IRS extended the deadline for participants to make after-tax contributions to 2019 Health Savings Accounts to July 15, 2020, to coincide with the extended tax filing date.  Also, consider the following:

Other Considerations