Dependent Care FSA (DCFSA)

What happens to my Dependent Care Flexible Spending Account (DCFSA) upon termination?

Most of your benefits are funded by your employer and tied directly to your employment status. When you leave your current employer, you generally lose access to these perks as well. 

Run Out Period

However, some companies have a post-termination run out period for pre-tax accounts like your DCFSA. During this period, you are able to submit expenses for reimbursement for any eligible expenses incurred during your time of employment. New expenses and new card transactions are not eligible here.

This timeframe is chosen by your employer, not the IRS, and can last for any period of time, but the most common periods are 30-90 days. Once this time period passes, your account will officially close and any unused funds will expire, so expense submissions will need to be made prior to this date.

Grace Period

Some employers offer grace periods instead of runout periods. A grace period is an additional period of time for employees to incur claims after the end of the plan year. As per the IRS regulations, the maximum grace period duration is 2 months and 15 days.

During a grace period, employees can incur new expenses and use any unused funds from their prior plan year to be reimbursed for the expense. Expenses must be submitted within the plan’s runout period. 

Accessing Your Account During Run Out or Grace Periods

If you anticipate making use of a run out or grace period, we will need to add a personal email address to grant you temporary account access to your account.

If you'd like us to add your personal email to your account, or if you have any additional questions, please reach out to Benepass Support for assistance.

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