2FA for P&A Participants
Are you familiar with the new California FSA notice requirement for employers? If not, keeping reading. Here’s everything you need to know about the new rule that went into effect on January 1, 2020.
Under Assembly Bill 1554, California employers must notify all FSA participants of their plan’s deadline for reimbursement of qualified expenses prior to the end of the current plan year. This rule applies to every type of FSA – Health, Dependent Care, Individual Premium and the Adoption Assistance Account. Currently, this law only applies to California employers, or to employers who have employees working in California.
Employers must notify all FSA participants of the deadline requirements in two different formats. For example, the following formats will meet the new law’s requirement:
The first two bullet points will satisfy the law’s requirements, so you don’t have to necessarily provide any additional communication. However, your company may choose to provide participants with more communication pieces or additional balance statements. Please contact P&A Group if you are interested in exploring different marketing options.
The new regulation is intended to help reduce the amount of forfeitures participants have after the plan year ends. Some employers are already reducing forfeitures by adding a grace period or carry forward provision to their FSA. These features are popular because they prevent participants from losing funds in their account.
Employers should also consider how they notify termed employees about their FSA plan deadlines for reimbursement. Many employers include this information in their exit paperwork. However, under the new law, termed employees must also receive an electronic notification of their reimbursement.
Another item to consider is special deadline dates for termed employees. For instance, some employers give termed employees 60 days to submit claims for expenses incurred prior to the termination date. Other employers may have a longer deadline – 90 days or even 120 days. If you’re unsure how your FSA currently operates, check your company’s SPD.
If you have any questions about your FSA plan, please contact a member of our team.