BPA is providing the below resources and guidance for our clients to navigate the benefit changes occurring due to the COVID-19 Pandemic. This document describes the impact of the CARES Act on your FSA, HSA, and HRA benefit plans.
Impact of the CARES Act on your FSA / HSA / HRA
The amendment guide below is a list of available amendments for your flexible spending plans. This document provides links to the regulatory guidance issued by government agencies as well as the amendment documents that can be completed and returned to BPA.
Following is a brief summary of what the IRS is allowing:
- · Mid-year election changes for group health coverage for the remainder of the 2020 plan year without a qualifying status change event. We think that this change is broadly beneficial and helps employees adjust their health coverage in accordance with unforeseen medical needs or changes in their financial status.
- · Mid-year election changes for healthcare and day care FSAs for the remainder of the 2020 plan year without a qualifying status change event. While mid-year changes to DCFSAs have always been permissible for parents whose day care and school arrangements have been impacted by COVID, the relaxation of changes to HCFSA elections further helps employees address medical and financial needs. This change also allows participants to enroll or increase their election to take advantage of the newly-eligible over-the-counter medication and menstrual care items provided through the CARES Act.
- · Extension of the FSA Grace Period through December 31st, 2020. Employers may now extend the normal 2.5 month FSA grace period through year-end, allowing FSA participants to incur expenses and use funds available through the grace period for the entire 2020 calendar year.
- · Permanent increases to the FSA Carryover amount and indexing it to the plan maximum. For plans beginning in 2020, this raises the ceiling on the amounts that FSA participants can carry over into the next plan year, and reduces the likelihood of forfeiture for certain participants.
Unlike the previous CARES Act and DOL changes, the IRS notices are not mandatory, and employers can choose whether or not to adopt these provisions within their plans. If you choose to adopt these new provisions, you must execute a plan amendment for each change and return it to us before the changes will be enabled in our systems.