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BenefitsLink Health & Welfare Plans Newsletter

Supplement to
December 16, 2013
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Supplement to December 16, 2013

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[Official Guidance]

Text of IRS Notice 2014-01: Cafeteria Plans, Flexible Spending Arrangements, and Health Savings Accounts -- Elections and Reimbursements for Same-Sex Spouses Following the Windsor Supreme Court Decision (PDF)
"A cafeteria plan may treat a participant who was married to a same-sex spouse as of the date of the Windsor decision (June 26, 2013) as if the participant experienced a change in legal marital status for purposes of Treas. Reg. 1.125-4(c). Accordingly, a cafeteria plan may permit such a participant to revoke an existing election and make a new election in a manner consistent with the change in legal marital status.... A change in the tax treatment of a benefit offered under a cafeteria plan generally does not constitute a significant change in the cost of coverage for purposes of Treas. Reg. 1.125-4(f).... [F]or periods between June 26 and December 31, 2013, a cafeteria plan will not be treated as having failed to meet the requirements of section 125 or Treas. Reg. 1.125-4 solely because the plan permitted a participant with a same-sex spouse to make a mid-year election change ... as a result of the plan administrator's interpretation that the change in tax treatment of spousal health coverage arising from the Windsor decision resulted in a significant change in the cost of health coverage.... An employer that, before the end of the cafeteria plan year including December 16, 2013, receives notice that such a participant is married to the individual receiving health coverage must begin treating the amount that the employee pays for the spousal coverage as a pre-tax salary reduction under the plan no later than the later of (a) the date that a change in legal marital status would be required to be reflected for income tax withholding purposes under section 3402, or (b) a reasonable period of time after December 16, 2013.... A cafeteria plan may permit a participant's FSA, including a health, dependent care, or adoption assistance FSA, to reimburse covered expenses of the participant's same-sex spouse or the same-sex spouse's dependent that were incurred during a period beginning on a date that is no earlier than (a) the beginning of the cafeteria plan year that includes the date of the Windsor decision or (b) the date of marriage, if later." (Internal Revenue Service)  

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