COVID-19 High Deductible Health Plan and IRC Section 125 Changes Expiring in 2022


Provisions in the CARES Act allowed HSA-qualified High Deductible Health Plan (HDHP) participants to receive telemedicine care on a first-dollar basis for plan years beginning on or before December 31, 2021. Additionally, the IRS issued guidance allowing HDHPs to cover the testing and treatment of COVID-19 prior to a participant meeting their deductible under the plan. This guidance is effective through the end of the declared COVID-19 public health emergency; however, the CARES Act rule suspending deductible requirements for telehealth visits will expire on December 31, 2021. With that said, there have been several bipartisan bills introduced in Congress aiming to expand or permanently waive the deductible for telehealth services. As these bills are still in the early stages, employers should be prepared to comply and make the necessary changes ahead of December 31st.

Congress enacted temporary rules for health flexible spending accounts (FSAs) and dependent care assistance programs (DCAP) under IRC Section 125 (Cafeteria Plans) as a result of the COVID-19 pandemic for plan years 2020 and 2021. Under the temporary rules, employers sponsoring FSAs were able to allow flexibility for carryovers and unused contributions from the 2020 and 2021 plan years, as well as extend the permissible grace periods for the same plan years. Additionally, employers with DCAPs in place were able to provide carryover options for dependents who aged out during the pandemic and increase the annual contribution limit to $10,500 (up from $5,000) in 2021, but will be capped at $5,000 for 2022.  Employers that adopted any of the allowable plan changes must amend their plan documents to account for the changes.

If you have any questions or need any guidance on the above, please reach out to your account team or email us at


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