Back in May 2020, the Departments of Labor, the Treasury, and the Internal Revenue Service (IRS) (collectively, the "Agencies") extended certain deadlines for plans subject to ERISA–including the runout period, in which Healthcare Flexible Spending Account (FSA) participants can submit claims from their 2020 Healthcare FSA.
Extension of runout dates
Since the announcement, HealthEquity has helped employers implement the runout guidance for their team members. This relief will last until 60 days following the federal government’s declaration of the end of the COVID-19 National Emergency (also known as the "Outbreak Period").
Unfortunately, COVID-19 is still a part of our lives. Because of this, plans may implement an extended runout period to file FSA claims for available 2020 FSAs.
Here’s the technical guidance
For 2020 Healthcare FSA plan years, the available runout period—to accommodate the Agencies’ guidance concerning the individual application of plan deadline relief—applicable deadlines for individuals and plans that fall within the Outbreak Period will be extended on a case-by-case basis until the earlier of (1) the end of the Outbreak Period; or (2) one year from the date the plan or individual’s deadline period would have commenced (which will vary by individual occurrence). So, if your 2020 healthcare FSA plan year ran from January 1, 2020 to December 31, 2020 and your original runout date was March 31, 2021, the available runout date may be extended to March 31, 2022 (assuming the end of the National Emergency is not declared prior to this date).
What does this mean?
Essentially, the updated guidance allows extensions during COVID-19. There could be more time to file claims.
What are runout dates?
For FSAs, a runout is extra time past the last day of a health plan year for participants to file reimbursement claims for eligible expenses incurred during the plan year.
Who determines runout dates?
Generally, runout periods are determined solely by employers.
What is the difference between a runout date and a grace period?
The healthcare FSA runout period is NOT the same as the healthcare FSA grace period. As stated, the runout period is an additional period following the end of the plan year in which your plan participants may submit claims incurred during the previous plan year. The grace period is an additional period (up to 2.5 months) following the generally applicable end of the plan year.
HealthEquity is working hard to support employers and their team members during the COVID-19 pandemic. Visit our COVID-19 Employer Resources page or COVID-19 Member Resources page for the latest information.
HealthEquity does not provide legal, tax, financial or medical advice. Always consult a professional when making life-changing decisions.