Important Plan Considerations Regarding FSA Mid-Year Changes

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Important Plan Considerations Regarding FSA Mid-Year Changes

As you are aware, in order to provide additional relief to Americans during these challenging times, the IRS released Notice 2020-29 and 2020-33. These notices provided new relaxed rules for 2020 that affected Health Flexible Spending Accounts (FSAs).

As a reminder if you have allowed employees to make changes mid year, please be aware of the following:

Making Changes to Elections:

Important Plan Consideration: Please note reducing future deductions to $0 is different than terminating a member’s plan. An active employee who chooses to “terminate” their plan will lose their ability to incur claims against any remaining funds in their account. Funds will be only available via the run out provisions for claims incurred while the member was an active participant in the plan.

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