American Rescue Plan Act
(Temporary Increase to IRS Maximum DCAP Contribution)
Do we need to amend our plan to take advantage of this?
- This depends on your plan adoption agreement. Please contact your plan administrator to confirm or fill out the attached amendment. Note that the increase will only take effect for plan years that begin in 2021.
Is this only allowable for employees who elected a DCAP contribution for the 2021 Plan Year?
- If an employee is eligible for your cafeteria plan and they are not currently receiving distributions for a DCAP FSA, this is considered a $0.00 election. Based on your plan documents, Employees with a $0.00 election would be allowed to increase their election amount as long as the following requirements also applied.
When are participants eligible to take advantage of this change?
- - If your plan year starts in 2021; AND
- - If your plan (or amendment) allows for the increase; AND
- - If the participant has had a change event, OR the participant elects the increased contribution in open enrollment, OR your plan signed the previous amendment allowing mid-year election changes because COVID-19 is considered a change event for all.
If our plan allows for this change, how do participants that want to take advantage of this increase their election?
- A change event form must be filled out and submitted to the payroll department for appropriate adjustments and then to Aviben for processing.
Is there a fee associated with amending our plan?
- If you have already paid for a COVID-19-related amendment, there is no additional fee for this amendment. If this is the first amendment you have made to your plan as a result of COVID-19, there will be a $50.00 fee.