The IRS released two notices (2020-29 & 2020-33) providing relief on cafeteria plan election rules and increasing the allowed health FSA carryover. These notices are not an employer requirement, rather options to consider. Keep in mind that if you want to adopt any of the following, your plan documents must be updated and communicated to employees by issuing a Summary of Material Modifications:
– Allow coverage for eligible over-the-counter (OTC) items without a prescription
– Allow plans to provide an extended grace period to pay or reimburse medical or dependent care expenses
– Allow mid-year election changes, including employee enrollment who initially declined
– Allow for increase in FSA carryover amount from $500 to $550
If you are interested in any of the above modifications to your plan, contact your Business Benefits representative or advisor at 859-331-3232, so we can coordinate with your administrator.
One of our vendors, Chard Snyder, created a couple easy to use reference pieces: