IRS to Allow Mid-Year Changes to Employee Health Plans and Dependent Care Elections
The IRS released guidance to temporarily allow changes to section 125 cafeteria plans.
The changes include…
- Extending the claims period for health flexible spending arrangements (FSAs) and dependent care assistance programs. Taxpayers can apply unused amounts remaining in a health FSA or dependent care assistance program for expenses incurred for those same qualified benefits through December 31, 2020.
- Allowing taxpayers the opportunity to make mid-year changes for health coverage, health FSAs, and dependent care assistance programs.
- For currently enrolled employer sponsored health coverage –
- make a new prospective election that the employee may have initially declined
- change coverage options, add family members, prospectively
- revoke an existing election and make a new election to enroll in a different health coverage sponsored by the same employer on a prospective basis
- revoke coverage (if certified in writing they are enrolled in another health care plan not sponsored by the employer) on a prospective basis coverage
- For currently enrolled employer sponsored health coverage –
- Relief for high deductible plans to cover expenses related to COVID-19, as well as allowing for telehealth services retroactively to January 1, 2020.
- Increasing the FSA carryover amount from $500 to $550 for the 2020 plan year.
