Stimulus law allows more time for workers to use unspent Flexible Spending Account funds

Employees who didn’t spend all the money in their Flexible Spending Accounts for health care and daycare costs have more time to spend it, under a provision from the federal stimulus bill.

Many workers may not have spent all the money in their FSAs because of the COVID-19 pandemic. For the 2020 and 2021 plan years, employers can allow workers to carry over unused balances to the next plan year.

The law aims to provide additional flexibility on how employees use FSAs, including a provision that lets workers change the amount they contribute to their FSAs in the 2021 plan year, even if the worker hasn’t experienced a change in status.