On Dec. 21, 2020, Congress passed a $900 billion stimulus bill that includes emergency economic relief, government funding and tax cuts. The bill also includes provisions that will impact group health plans, including a ban on surprise medical billing and Health Flexible Spending Account (FSA) and Dependent Care Account (DCA) provisions, which are summarized below.
Increased Flexibility For FSAs and DCAs
The bill allows, but does not require, employers to adopt some or all of the following changes:
- to permit FSAs & DCAs to carryover all unused amounts from 2020 to 2021 and from 2021 to 2022
- to permit an extended grace period, up to 12 months, for FSAs & DCAs with plan years ending in 2020 or 2021
- to raise the maximum age of eligible dependents from 12 to 13 for DCAs for the 2020 plan year (and for unused amounts from the 2020 plan year carried over into the 2021 plan year)
- to allow prospective election changes for FSA and DCA plans ending in 2021 without regard to any change of status requirements (similar to Notice 2020-29)
- to permit Health FSA participants who terminate during 2020 or 2021 to spend down unused balances through the end of the plan year (similar to what is already permitted for DCAs)
Ban on Surprise Medical Bills
The bill also includes the No Surprises Act, a ban on surprise medical bills, which will take effect beginning in 2022 if signed into law.
Surprise medical bills occur when patients unexpectedly receive care from out-of-network health care providers. The Act applies to surprise bills from doctors, hospitals and air ambulances. It prohibits these providers from billing patients who have health coverage for unpaid balances. Rather, providers will have to work with the group health plan or health insurance issuer to determine the appropriate amount to be paid by the plan or issuer, under the methodology provided in the Act.
The Dept. of Health and Human Services will work with the Depts. of Labor and the Treasury to issue regulations regarding this methodology and other requirements of the Act.
Our Group Benefits and Compliance team will continue to keep you updated as additional information becomes available.