COVID-19 relief: Changes to PEBB Medical FSA and DCAP rules

Wed, 02/17/2021

We know 2020 probably didn’t go as planned. That’s why we’re offering extra flexibility with 2020 and 2021 Medical Flexible Spending Arrangement (FSA) and Dependent Care Assistance Program (DCAP) funds. These changes are allowed under the federal COVID-19 relief bill that passed in December 2020. They apply through December 31, 2021.

Make 2021 election changes with no qualifying event

If you enrolled in a Medical FSA or DCAP for 2021, you can change your elections without a qualifying event. This opportunity is available three times: in March, June, and September 2021. To make an election change, submit the Change in Status form to your payroll or benefits office during these months. (University of Washington employees must use Workday.) Normal election minimums and maximums still apply.

Payroll deduction changes are effective the following month.

  • Changes submitted in March are effective in April.
  • Changes submitted in June are effective in July.
  • Changes submitted in September are effective in October.

Please note that you can only lower your election to the amount you have already contributed or claimed for the year. For example, if you elected $2,000 for your Medical FSA and you have already contributed or claimed $400, you can lower your election only to $400. Remember, the minimum annual election for both Medical FSA and DCAP is $240.

These opportunities only allow you to change your 2021 annual elections. You cannot make any other changes, like enrolling in Medical FSA or DCAP, without a qualifying event. If you want to make a change outside of March, June, or September, you must have a qualifying event that creates a special open enrollment. 

Flexibility with 2020 DCAP funds

You may continue to incur expenses and submit claims against your 2020 DCAP funds through December 31, 2021 — giving you an extra 12 months to spend your funds. You can also spend 2020 funds on children up to when they turn age 14. (The normal limit is children up to age 13.)

The 12-month grace period does not apply to Medical FSA funds.

Spend Medical FSA funds after you leave employment

You may use unspent 2020 or 2021 Medical FSA funds after you leave employment, without enrolling in PEBB Continuation Coverage (COBRA). If you left a job in 2020, or plan to do so in 2021, you can continue to incur expenses and submit claims for reimbursement through the end of the plan year in which you left employment, including the grace period.

For example, if you left work in October 2020, you have through March 2021 to incur eligible expenses and submit claims against your 2020 funds. See below to learn more about the Medical FSA grace period. All requirements for submitting claims and documentation still apply. Please note that your debit card will not work once you leave employment.

The Medical FSA grace period still applies

The normal Medical FSA grace period for 2020 funds is still in effect. You may continue to incur eligible expenses through March 15, 2021. You must submit all eligible 2020 Medical FSA claims for reimbursement by March 31, 2021. Learn more about the Medical FSA grace period.

Are you a represented employee whose rate of pay on November 1, 2020 was $50,004 a year or less?

If so, you likely received a $250 Medical FSA contribution from your employer in January 2021. Learn more about this employer-paid benefit on the Medical FSA webpage.

Unfortunately, some members received this $250 contribution in error. See if you were affected.