FSA's Billion-Dollar Challenge: Addressing Consumer Spend-Down Before the CAA Expires
Published on November 21st, 2022
Nine months after the CARES Act, Congress passed the 2021 Consolidated Appropriations Act (CAA), aimed at providing Americans with relief from ongoing issues related to the COVID-19 pandemic. CAA included provisions that gave employers greater flexibility with their Health and Dependent Care FSA offerings, allowing special considerations for employees during an unprecedented time. Notably, the provisions now allowed participants to carry over their entire unused FSA balance, and extended the grace period for up to 12 months after the end of the plan year.
As a result, many FSA account holders have accumulated higher balances than ever before. In fact, CNBC estimates that $1 billion in FSA funds could be forfeited this year. With CAA set to expire at the end of 2022, it’s more important than ever for account holders to “use it or lose it.” Employers have a responsibility to ensure their employees are aware and being proactive around spending down FSA funds and determining their 2023 contributions. Benefits administrators, in turn, can provide education and resources to spread the good word.
To help explain the upstream and downstream effects of CAA’s expiration, Alegeus is pleased to offer an on-demand webinar featuring Jason Lacey, partner at Foulston Siefkin LLP, and Sandy Gleason, vice president of industry consulting for Alegeus. The webinar covers topics including:
- What exactly is expiring on December 31, 2022?
- Why is this impact different from other plan years?
- How you can position your employer groups to help employees not lose funds
- Ideas on how employees can spend down funds vs. forfeiting them
Take a listen!