New COVID-19 instructions for Section 125 rules INSURANCE

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The IRS was released on May 12, 2020 Note 2020-29This provides temporary flexibility for mid-year election changes as part of a section 125 cafeteria plan in calendar year 2020. The changes are intended to enable employers to respond to changes in worker needs as a result of the COVID 19 pandemic.

These guidelines relate to mid-year elections for self-insured and fully insured, employer-sponsored health insurance, flexible health expenditure regulations (Health FSAs), and dependent care assistance programs (DCAPs).

For full details, including a list of eligible election changes, download the full legal update.

Relief for FSAs and HSAs

The notice also provides for plans to allow participants to apply unused amounts in health FSAs to medical expenses due until December 31, 2020 and unused amounts in dependent care assistance programs to dependent care expenses, expires on December 31, 2020 The notice provides that earlier reliefs on high deductible health insurance and expenses related to COVID-19 related to a temporary exemption from telemedical services can be applied retrospectively until January 1, 2020.

In addition, the IRS was published Note 2020-33This raises the cap on unused amounts remaining in a health or purpose FSA that can be carried over to the following year to $ 550 for 2020.

Click here for the full legal update.

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