On Could 12, 2020, the IRS launched Notice 2020-29, which supplies non permanent flexibility for mid-year election modifications below a Part 125 cafeteria plan throughout calendar 12 months 2020. The modifications are designed to permit employers to reply to modifications in worker wants because of the COVID-19 pandemic.
This steering pertains to mid-year elections for self-insured and totally insured employer-sponsored well being protection, well being versatile spending preparations (well being FSAs) and dependent care help applications (DCAPs).
For additional particulars, together with an inventory of permitted election modifications, download the complete legal update.
Reduction for FSAs and HSAs
The discover additionally permits plans to allow members to use unused quantities in well being FSAs to medical care bills incurred by Dec. 31, 2020, and unused quantities in dependent care help applications to dependent care bills incurred by Dec. 31, 2020. Additional, the discover supplies that earlier reduction supplied relating to high-deductible well being plans and bills associated to COVID-19 relating to a short lived exemption for telehealth providers could also be utilized retroactively to Jan. 1, 2020.
Moreover, the IRS launched Notice 2020-33, which will increase the restrict for unused quantities remaining in a well being or restricted goal FSA which may be carried over into the next 12 months to $550 for 2020.
