Relief Provisions for FSAs and DCAPs Must Be Adopted by March 31

Certain relief provisions created under the Consolidated Appropriations Act (CAA) of 2021 are available for cooperatives to adopt this year if they choose.

If your co-op offers its employees access to a flexible spending account (FSA), limited-use FSA, and/or the dependent care assistance program (DCAP), the temporary provisions can provide financial relief to employees with these accounts, retroactively for the 2021 plan year.

Information on the CAA’s provisions was emailed in late February to all co-ops sponsoring the 125 Plan.

Interested co-ops should inform NRECA of their final decision by March 31, 2022. Co-ops that have already requested to adopt one or more of the provisions can expect to receive their plan documents from NRECA in mid-April.

Contact Henok Abraham at Henok.Abraham@nreca.coop with adoption requests or any other questions.

What provisions can be adopted this year?

Under the CAA, your co-op can:

1. Allow participants to carry over all unused FSA and DCAP funds from 2021 to the 2022 plan year. Your co-op can adopt this provision regardless of whether you offer the existing $550 carryover feature.
2. Extend FSA and DCAP grace periods from 2½ months to 12 months. This means participants can use their 2021 contributions to reimburse eligible expenses that were incurred at any point during 2021 or 2022. Your co-op can adopt this provision regardless of whether you offer the existing grace period feature.

NOTE: Co-ops can adopt either one of the above provisions, but not both.