Flexibility for Taxpayer Elections in Cafeteria Plans - Jun 2020
Money
Contributed by : Mukesh Makker
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Temporary changes to Section 125 cafeteria plans due to the coronavirus pandemic allow flexibility for taxpayers participating in cafeteria plans. These changes include extending the claims period for health flexible spending arrangements (FSAs) and dependent care assistance programs and allow taxpayers to make mid-year changes.
Specifically, these temporary changes for taxpayers include:
extending claims periods for taxpayers to apply unused amounts remaining in a health FSA or dependent care assistance program for expenses incurred for those same qualified benefits through December 31, 2020.
expanding the ability of taxpayers to make mid-year elections for health coverage, health FSAs, and dependent care assistance programs, allowing them to respond to changes in needs as a result of the COVID-19 pandemic.
applying earlier relief for high deductible health plans to cover expenses related to COVID-19, and a temporary exemption for telehealth services retroactively to January 1, 2020.
Furthermore, temporary relief for high deductible health plans may be applied retroactively to January 1, 2020 and the $500 permitted carryover amount for health FSAs increases to $550. This amount is adjusted annually for inflation.
Please contact the office if you have any questions.
| About Author |
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Mr. Maker is a certified Public Accountant and serving the South Asian community since 1993.
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Website: https://www.taxmaker.com/newsletter.php#8
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