New IRS Rules for Section 125 Cafeteria Plans: Key Plan Amendments, Timing of Elections, Claims, HDHP Relief

Strafford

Note: CPE credit is not offered on this program

This webinar will provide employee benefits counsel with an in-depth analysis of recently IRS rules for Section 125 cafeteria plans and challenges for plan sponsors and administrators. The panel will discuss key provisions of recently issued IRS Notice 2020-29 and Notice 2020-33, the timing of elections, managing claims, and relief for high deductible health plans. The panel will also discuss considerations for plan amendments, compliance traps to avoid, and potential implications for plan sponsors and administrators.

On May 12, 2020, the IRS issued Notice 2020-29 and Notice 2020-33, providing new rules and guidance for Section 125 cafeteria plans. These Notices provide options for employers regarding cafeteria plan benefits, and counsel must recognize critical legal implications and compliance issues.

IRS Notice 2020-29 provides employers with the option of amending its cafeteria plan to allow employees to make proposed changes to their health plan and health FSA and dependent care FSA elections in 2020, which can apply retroactively to Jan. 1, 2020. IRS Notice 2020-33 also provides an allowable carryover of unused healthcare FSA balances from one plan year to the next. It removes prior limits on the treatment of reimbursements of medical care expenses for health reimbursement arrangements.

Employee benefits counsel and employers must carefully reevaluate current plan structures and determine whether they need amending. Any plan amendments under Notice 2020-29 and Notice 2020-33 must be adopted no later than Dec. 31, 2021, and be effective retroactively to Jan. 1, 2020.

Listen as our panel discusses crucial provisions of IRS Notice 2020-29 and Notice 2020-33, considerations for plan amendments, compliance traps to avoid, and potential legal implications for plan sponsors and administrators.

Outline:

• IRS Notice 2020-29
• IRS Notice 2020-33
• Plan amendments
• Compliance traps and best practices for plan sponsors and administrators

The panel will review these and other key issues:

• What are the key provisions of IRS Notice 2020-29 and Notice 2020-33?
• What are the critical issues regarding the timing of elections?
• What are the key provisions for amending cafeteria plans in accord with IRS Notice 2020-29 and Notice 2020-33?
• What are the potential challenges in managing claims?
• What relief is provided for high deductible health plans?
• What are the potential compliance traps and methods to avoid them?

Faculty: Dannae Delano, Partner, The Wagner Law Group

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