City employees urge Health Service Board to let staff use American Rescue Plan�27s larger dependent-care FSA limit

Several San Francisco city employees and union representatives urged the Health Service Board on May 13 to allow city workers to use a higher dependent-care flexible spending account (FSA) limit authorized in the American Rescue Plan Act of 2021.

At the start of the meeting, callers including Liz Bryson and Natalie Hoffmeister (both identified as Local 21 members) described the financial strain of childcare in the Bay Area and recommended the board and staff adopt the ARP27s temporary increase from $5,000 to $10,500 for married filers in tax year 2021. "This increase was authorized in the American Rescue Plan, but HSS has yet to allow city employees to take advantage of this benefit," Liz Bryson said during public comment, adding that childcare costs in the region can run about $2,000 per month per child.

Director27s office staff told the board they are researching IRS and federal implementation details and plan to bring a recommendation to the June board meeting. In his director27s report, the director said staff had begun conversations about the statutory allowance and the department will provide details and a recommendation in June once guidance from the IRS is clear.

Board members generally signaled support for evaluating the change but emphasized the need for staff to confirm federal and IRS rules before altering plan administration. The board did not take a formal vote on the request at the May 13 meeting; the director committed to returning with a staff recommendation in June.

Next steps: staff will report back at the June Health Service Board meeting with legal and administrative recommendations based on IRS guidance and operational feasibility.