California Law Passed for Flexible Spending Accounts

On August 30, 2019, California Governor Gavin Newsom signed a bill, AB 1554, into law which impacts health care, dependent care and adoption assistance flexible spending accounts (FSAs). The law requires that employers (or their administrators) notify FSA participants of the deadline to submit claims for reimbursement before any amounts are forfeited from their FSA accounts. The notice must be provided before the end of the plan year and must be provided in two different forms, one of which may be electronic. The following forms of distributions were listed in the legislation but employers are not limited to only these types of notifications:

  1. Electronic mail communication
  2. Telephone communication
  3. Text message notification
  4. Postal mail notification
  5. In-person notification

The law is effective January 1, 2020. TRI-AD already alerts participants of the deadlines to submit claims (the run-out period) in our participant communications. In order to comply with the law, TRI-AD will provide one additional form of notification on or before the end of the 2020 plan year.

Please contact your TRI-AD Client Service Manager if you have any questions about this change.