[UCRDBR] Update – FSA – Filing deadline remains as April 15, 2021 for the 2020 Tax Year

[Departmental Benefits Representatives]

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August 17, 2021
To:
Department Benefits Representatives (DBRs)

From:
HR Benefits Office

Re:
Update – FSA – Filing deadline remains as April 15, 2021 for the 2020 Tax Year

We are sending you an update to the communication that was sent earlier this year<https://hr.ucr.edu/sites/g/files/rcwecm656/files/2021-08/3.29.21%20Flexible%20Spending%20Accounts%20-%20Filing%20deadline%20remains%20as%20April%2015%2C%202021%20for%20the%202020%20Tax%20Year.pdf> that UC was not able to extend the claims-filing deadline for the Health Flexible Spending Account (FSA). This meant that if participants wanted to be reimbursed for 2020 eligible expenses, they had to submit their Health FSA claims to WageWorks by April 15, 2021.

Clarification on 2020 Health FSA Claims Deadline
As you may recall, under the terms of the Consolidated Appropriations Act (CAA) of 2021, UC adopted a provision which allowed the full unused Health FSA balance from the 2020 plan year to be carried over to the 2021 plan year. Since UC’s Health FSA has a carryover provision, rather than a grace period, all 2020 claims must have been submitted by April 15, 2021. Health FSA claims for the 2020 plan year are no longer being accepted. Conflicting information was shared during a recent training, so we wanted to clarify this point.

However, if participants submitted 2020 claims to WageWorks that remain unsubstantiated, participants need to follow up with WEX to provide documentation to complete the substantiation. Any unresolved claims will be reported on participants’ 2022 W-2s as imputed income.

Overspent FSA Accounts
Due to the data validity challenges experienced when transferring information from WageWorks to WEX, about 300 participants temporarily had incorrect balances and overspent their Health and DepCare accounts. To be compliant with IRS regulations, participants will be asked to repay the overspent amounts. Participants who overspent will be sent an email<https://hr.ucr.edu/sites/g/files/rcwecm656/files/2021-08/fsa-account-carryover-balance-proof.pdf> as well as a claims denial notice<https://hr.ucr.edu/sites/g/files/rcwecm656/files/2021-08/dbi-denial-letter-with-repayment.pdf>. If participants fail to repay the excess reimbursement, the overspent amounts will be reflected on their 2022 W-2s as taxable income.

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