IRS offers relief to cafeteria plans, HDHPs, individual-coverage HRAs 

IRS Notice 2020-29 expands temporary COVID-19 relief so cafeteria plans can allow certain midyear election changes and extend special grace periods for claims under health flexible spending arrangements (FSAs) and dependent care assistance programs (DCAPs). Notice 2020-29 also clarifies earlier guidance for health savings accounts (HSAs) and high-deductible health plans (HDHPs) on coverage of COVID-19 testing and treatment costs and telehealth services. 

Permanent guidance in Notice 2020-33 provides an annual cost-of-living increase to the $500 health FSA carryover limit, starting in 2020. Notice 2020-33 also allows individual-coverage health reimbursement arrangements (HRAs) to cover current plan-year premiums paid before the plan year began.

This GRIST details both notices and steps for employers to consider. The most important step is for employers to coordinate with an insured plan’s carrier or a self-funded plan’s stop-loss carrier before adopting certain midyear election changes. Download the 11-page PDF to read full coverage.