Carry Forward Changes
Under the Consolidated Appropriations Act of 2021, employers can make the following changes to the carry forward feature:
- Temporarily remove the maximum limit on the Health FSA carry forward
- Temporarily add the carry forward to the Dependent Care account
These provisions apply to 2020 and 2021 plan years.
The above changes are not mandatory. Employers who want to allow election changes must make an amendment to their plan no later than the last day of the first calendar year beginning after the end of the plan year in which the amendment is effective.
For example, if you have a calendar plan year and adopt this provision beginning January 1, 2021, the amendment will need to be completed by December 31, 2022.