​​​​​Over the last several months, the Consolidated Appropriations Act 2021 and the American Rescue Plan Act of 2021 were signed into law. These bills allows employers to temporarily modify their benefit plans to help provide relief and greater flexibility to participants who had a FSA plan in 2020 and also now in 2021. Recently, the IRS issued clarification for employers and plan administrators regarding these temporary provisions for 2021.​

The State System is happy to announce that we have amended our benefit plan to allow the following:

Carryover for Health Care and Dependent Care

  • The full unused balance of 2020 FSAs will carryover to 2021. The carryover process will occur in early April 2021. As the specific timing of this process becomes identified, you will be notified when this occurs.

Dependent Care FSA Limit Increase

  • The dependent care FSA maximum election has been increased to $10,500 (or $5,250 for married individuals filing separately).

  • Employees may have to report amounts spent above $10,500 in 2021 as taxable income on their tax returns. Please consult with a tax professional if you have questions.

Mid-Year Election Changes

  • Employees enrolled in a 2021 FSA will have one opportunity to increase or decrease their 2021 annual election amount prospectively for any reason prior to July 1, 2021. 

    NOTE: You may decrease​ your 202​1 FSA annual election amount prospectively as long as both of the following criteria are met:

- Your new annual election amount cannot be less than the amount you have already been reimbursed from your 2021 FSA; and

- Your new annual election amount cannot be less than your year-to-date 2021 FSA contributions

Increase in Age of Eligible Dependents for Dependent Care FSA

  • ​Unused 2020 dependent care FSA funds may be used for 2020/2021 expenses incurred and submitted for reimbursement for dependents up to age 14. ​​


Frequently Asked Questions

Can I carryover my 2020 health care and dependent care FSA?
Yes, for the 2020 plan year, the full unused balance of both the health care and dependent care FSA will carryover into 2021. There is nothing an employee needs to do for this to occur. ​

When will the carryover occur?
The carryover is expected to occur in the beginning of April 2021, after the runout period is over on March 31. As the specific timing of this process becomes identified, you will be notified when this occurs.

Can I increase or decrease my 2021 election?
Employees who are already enrolled in a 2021 FSA account are permitted to make one change to increase or decrease their 2021 annual election amount prospectively for any reason prior to July 1, 2021. However, to decrease your 2021 annual election the following criteria must be met:

- Your new annual election amount cannot be less than the amount you have already been reimbursed from your 2021 FSA; and

- Your new annual election amount cannot be less than your year-to-date 2021 FSA contributions.

How do I increase my current 2021 FSA election?
Please use the change in status/election form to make changes to your election.

How do I decrease my current 2021 FSA election?
Please use the change in status/election form to make changes to your election. You also need to confirm that the annual election can be decreased to the new lower election amount. 

For the most current year-to-date 2021 FSA contribution amount, please log into Employee Self Service (ESS) , navigate to Employee Self-Service, Payroll, and Online Pay Statement.

For the most current year-to-date reimbursement from your 2021 health care FSA, please confirm at www.ConnectYourCare.com/PASSHE by logging into your account.​

How much can I elect to increase my dependent care FSA in 2021?
A dependent care FSA is used to help pay for childcare expenses, such as daycare or summer programs. As per the American Rescue Plan Act of 2021, employees are eligible to increase their dependent care FSA in 2021 to $10,500 (or $5,250 for married individuals​ filing separately). Employees may have to report amounts spent above $10,500 in 2021 as taxable income on their tax returns. Please consult with a tax professional if you have questions. 

These deductions will be spread across the remaining pays of the year and you should consider the increased amount that will be contributed per pay.​

Can I make a new FSA election in 2021 if I already did not have a 2021 FSA?
No, employees must already have a 2021 FSA election in order to make an election change by July 1, 2021.

If I want to change my FSA election to $0, can I get my contributions refunded?
No. Election changes are prospective and cannot go below what was already contributed to the plan and reimbursed to the employee by ConnectYourCare.

Are there any changes to the limits of a health care FSA in 2021?
No. The acts signed into law did not address any increased limit to the health care FSA election maximum.


What is the increased age limit to submit expenses for dependent care FSA?
Unused 2020 dependent care FSA funds may be used for 2020/2021 expenses incurred and submitted for reimbursement for dependent up to age 14.

If I am terminated can I submit expenses to my FSA?
Under the health care FSA, employees can submit expenses incurred prior to separation. Once you terminate, you must elect FSA through COBRA and contribute on a post-tax basis to have access to submit expenses that occurred​ after your termination.

Under the dependent care FSA, employees may submit claims incurred through the end of the plan year, up to the amount which was contributed during active employment. 


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