In this week’s episode of Hall Pass, CEO Jason Hall discusses COVID-19 FSA relief with Vice President of Client Services Bryan Coon. This relief was recently passed by the IRS through two notices. Bryan provides guidance for employers on what this relief enables them to do regarding their FSA plans.
Check out the video below:
COVID-19 FSA Relief Q&A
Question 1: What changes did the IRS and DOL make regarding FSAs to provide COVID-19 relief?
IRS Notice 2020-29 provides temporary COVID-19 relief by allowing employers to amend their FSAs so that participants can make mid-year election changes without a qualifying event.Also, employers now have the ability to extend FSA plan years or grace periods that end within this calendar year. Deadlines can be extended to December 31st, 2020.
In addition, HSA eligibility for High Deductible Health Plans is now preserved if HSA funds are being used to cover COVID-19 treatment or telehealth services. This further clarifies guidance included in the CARES Act.
Question 2: Have there been any changes regarding FSA rollover?
Currently, the maximum rollover amount for Medical FSAs is $500. IRS Notice 2020-33 indexes the rollover limit to 20% of the annual limit going forward. For 2020 Plan Year elections, the maximum rollover amount would be $550. ($550 is 20% of the maximum Medical FSA funding for 2020 – $2,750).
Question 3: With these changes, how will BRI alter its approach with participants and employers/broker partners?
This guidance passed in the two IRS notices allows the BRI team to better assist participants in effectively using their funds and making election changes if needed.
If employers would like to make changes to their FSA plans following this relief or have any additional questions, they should reach out to Client Services Specialist.
Want Additional Information?
We held a great webinar on “How COBRA & health plan deadlines are extended during the COVID-19 pandemic” that covers these changes as well as additional changes that were passed. If you missed it, watch the recording. Also, check out the following resources: