IRS guidance allows midyear changes on employee health plans, flex spending accounts
The Internal Revenue Service on Tuesday announced that employers have permission to let employees make midyear changes to their group health insurance coverage and to their flexible spending accounts for health care and dependent care for 2020, the San Francisco Chronicle reported. Employer groups have been lobbying the IRS and Congress to allow more flexibility in these plans because the coronavirus has vastly changed people’s need for, and access to, health care and child care. The new guidance includes only some of the changes the groups recommended. Under the new rules, employers — this year only — can let employees make midyear changes that would be in effect for the remainder of the year. Regarding flexible spending accounts, normally, employees must decide before the plan year starts how much to set aside. After that, they can’t change the amount except for specified life-changing events. This year only, they can make midyear changes going forward for any reason, if the employer allows. For more information, see the IRS guidance.