In response to the coronavirus crisis, this year only, the IRS has issued new guidelines to allow for employees to make mid-year changes to their health plans and FSA contributions. Typically plan changes are allowed only once a year during an employer’s open enrollment period, however, these new guidelines are allowing members to revisit their elections. All changes will hold for the remainder of the year.
The new guidelines allow, but don’t require employees to make the following changes:
Health Plan Changes:
-Drop their health insurance if they have another option
-Sign-up for health insurance through their employer if they haven’t already
-Switch to a different health plan through their employer
-Add family members to their insurance plan
Important note: These changes would require a temporary amendment to the Employer’s Section 125 Plan. Employers can decide the extent to which these changes are permitted.Review IRS bulletin outlining these changes here.
FSA Contributions:
-Employers can increase the carryover limit for employees from $500 to $550 or 20% (See IRS Bulletin)
-The grace period can be extended for employees to use their 2019 carryover balance (See IRS Bulletin)
*These changes are not mandatory for employers. It is up to the employer if they would like to offer any or all of these options to employees.
***Certain insurance carriers are not allowing mid-year changes to be made. Please consult with your Bond Team for more information.