If your organization is looking for ways to support your workers through the pandemic, participating in the FSA extension program is an excellent choice. MP’s HR services team shares six key benefits to offering the flexible spending account extension to your employees. (Side note: don’t forget to offer this option to everyone in your organization if you do so. You’ll be risking accusations of discrimination, otherwise.)
6 Key Benefits of the FSA Extension
- It eliminates the carryover limit for FSA dollars in the 2020 and 2021 plan years. The FSA extension for 2021 and 2020 will be particularly helpful during the pandemic when not only does every dollar need to be saved, but workers are also handling some unpredictable factors. People’s childcare and medical appointments have been deeply affected by the pandemic and it has been hard to plan or use the money set aside for these things.
- FSA dollars can be used for dependent care for children up to age 13 (it was previously 12 years old). Workers with older children who are in hybrid or remote school will appreciate this change, as they may find they need childcare for their older children.
- Employees can make new FSA elections mid-year. As mentioned above, the chaos of the pandemic has made it hard for workers to plan ahead for childcare and medical costs. Letting them make changes to their elections throughout the year will certainly ease the difficulty of living through the pandemic.
- It’s optional and can be implemented the way employers want. Employers can choose to implement the FSA extension so that it only applies to health care expenses, only to dependent care savings, or to both. The employer can also implement the extension for as long they’d like during 2021. (MP clients can use MP’s HR and payroll software to implement whatever version of these changes they think is best for their organization.)
- It helps build employee engagement. Letting your team know you’ve put together this option, even if they don’t use it, will go a long way in building goodwill. They’ll know that your organization wants to support them, even in difficult times. MP’s HR Manager Missy McCloy, who is implementing the FSA extension for MP employees said, “FSA is a huge benefit for employees, and they work hard for the dollars they earn. It’s great to put that aside pretax. We value our employees, and we want to support them and help them spend all their hard-earned dollars.”
- The paperwork to participate in this program is frequently easy and uncomplicated. Check with your plan administrator, or if you’re an MP client, our HR consulting team will be happy to help you with this process.
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