Employers can offer employees participating in health flexible spending accounts (FSAs) and dependent care FSAs greater flexibility for rolling over unused funds through 2022, under new IRS guidance.

Under the Consolidated Appropriations Act, 2021, employers can provide flexible spending account (FSA) participants with the options to make midyear contribution changes and to roll over unused amounts at the end of 2020 or 2021. Employers have several practical considerations when deciding whether to adopt these changes.