The following provisions, which apply only to plan years 2021 and 2022, are enacted pursuant to §214 of the Federal Taxpayer Certainty and Disaster Tax Relief Act of 2020 and other relevant federal law.
  (1) Dependent care reimbursement plan.
    (A) Unlimited carryover. A participant may carry over to plan year 2021 any unused amount in a dependent care reimbursement account that would have expired at the end of plan year 2020 and may carry over to plan year 2022 any unused amount in a dependent care reimbursement account that would have expired at the end of plan year 2021.
    (B) Grace periods. Because of unlimited carryover relief, grace periods for dependent care reimbursement accounts do not apply for plan years 2020 and 2021.
    (C) Dependent age extension. For plan years 2020 and 2021, the maximum age of a dependent is 14.
    (D) Prospective mid-year election changes. During calendar year 2020 and through plan year 2021, a participant may increase or decrease contribution amounts or end enrollment for a dependent care reimbursement account without a qualifying life event. A participant may not reduce contributions to an amount less than the total of:
      (i) the amount of payroll distributions in the account, if any; and
      (ii) the amount of reimbursement the participant has received, if any.
  (2) Health care reimbursement plan.
    (A) Unlimited carryover. A participant may carry over to plan year 2021 any unused amount in a health care reimbursement or limited purpose health care reimbursement account that would have expired at the end of plan year 2020 and may carry over to plan year 2022 any unused amount in a health care reimbursement or limited purpose health care reimbursement account that would have expired at the end of plan year 2021.
    (B) Post-termination reimbursement. A participant who ceases contributing to a health care reimbursement or limited purpose health care reimbursement account during plan year 2020 or 2021 may continue to receive reimbursement from any unused amount through the end of the plan year in which participation ended, including any grace period or extended grace period.
    (C) Prospective mid-year election changes. During calendar year 2020 and through plan year 2021, a participant may increase or decrease contributions or end enrollment for a health care reimbursement account or a limited purpose health care reimbursement account without a qualifying life event. A participant may not reduce contributions to an amount less than the total of:
      (i) the amount of payroll distributions in the account, if any; and
      (ii) the amount of reimbursement the participant has received, if any.

Source Note: The provisions of this §85.6 adopted to be effective December 27, 2021, 46 TexReg 9061