New law extends use of carryover flexible spending accounts
If you had unused funds in your health care or dependent care flexible spending accounts in 2020, a new federal law allows you to use all of those funds in 2021.
Previously, there was a cap on how much you could carryover into the new year, but now all unused 2020 funds may be carried over and used (within the same parameters as the 2021 funds).
Due to the new law, which was signed late last year, all employees will now be able to log into Workday and change their 2021 flexible spending account elections, if they choose. One example of why someone might wish to do this:
- Tommy Trojan had $1000 left over last year he did not use.
- He elected $1500 for this year, but now with the new law, he will have $2500 available.
- He doesn’t think he’ll need that much – he thinks he’ll be fine with $2000 – so he reduces his 2021 flexible spending account to just $1000 instead of the $1500 he elected during open enrollment.
The HR Service Center can help answer questions about this change. Contact their staff at (213) 821-8100, or email@example.com.