Quick Facts: On May 12, 2020, the Internal Revenue Service (“IRS”) released Notices 2020-29 and 2020-33, collectively providing guidance related to cafeteria plan elections, health flexible spending accounts (“Health FSAs”), and dependent care assistance programs (“DCAPs”).
- Notice 2020-29 permits employers to adopt temporary plan provisions allowing for:
- Mid-year election changes for health plans, health flexible spending accounts (Health FSAs), and dependent care assistance programs (DCAPs)
- Use of unused Health FSA and/or DCAP amounts remaining at the end of a grace period or plan year ending in 2020
- Notice 2020-29 also clarifies that high deductible health plans providing coverage for testing and treatment for COVID-19, as well as telehealth, applies retroactively to January 1, 2020
- Notice 2020-33 increases the Health FSA carryover limit from $500 to $550 for 2021
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