All eligible employees should be informed of the changes. IRS Notice , also released May 12, increases the amount of funds that health FSA participants can carry over without penalty at the end of the year for plans that use the carryover option.
While Sweetnam called the inflation adjustment helpful, he noted that many have advocated allowing much larger carryover amounts or eliminating the use-it-or-lose-it rule completely. Notice also clarified that the previously provided temporary relief for high-deductible health plans permitting them to cover COVID related services at no cost may be applied retroactively to Jan. Different Plans Had Different Rules. Some midyear elective-contribution changes have long been permitted.
For instance, changes to payroll deductions to fund k or similar defined contribution retirement plans, HSAs, and commuter benefit plans can be made at any time for any reason, although employers may limit changes for administrative purposes, such as to once per month.
For employer-sponsored group health, dental and vision plans, however, changes are restricted. Under tax code Section , elective contributions typically can be changed only within 30 days of a qualifying event as determined by the IRS, such as marriage, divorce, job change, birth or adoption of a child, or when a dependent child reaches age Sweetnam noted an issue with the new guidance that could complicate matters for employees who had a health FSA and were newly enrolled in an HSA in An employer that carries over unused funds from a prior year to a current year under a general-purpose health FSA will not be eligible for HSA contributions for the entire current plan year.
To avoid this issue, employers can allow carryover health FSA funds to be transferred an HSA-compatible, limited-purpose FSA, which can be used only for vision care and dental expenses. SHRM also requested a one-time, pandemic-related window for employees who may have declined coverage at the start of the calendar year to enroll in an employer's health plan, as the IRS is now allowing for Just under half 47 percent of the employers surveyed indicated they will allow some type of mid-year change, with the most popular being changing contributions to a dependent care FSA 43 percent and changing contributions to health care FSA 29 percent.
Fewer employers are planning to allow changes to medical plan elections, such as enrolling in a plan after having waived coverage or adding a dependent. Nevertheless, approximately 1 in 10 say they will allow these types of changes. Savan said while there is very little downside in allowing dependent care FSA changes, employers should be mindful that there are some potential risks associated with allowing changes to health FSAs.
These risks include immediate employee access to full account limits during a time when employers are hyper-focused on conserving cash, as well as the potential for employees to accelerate their use of health FSA funds and leave the plan in a deficit if they discontinue employment.
He advised employers to weigh these risks before liberalizing the terms of midyear enrollment in medical plans in I agree to allow FSAFEDS to contact me regarding important program updates through various mechanisms including, but not limited to, automated calls to my home or cell number, email, texts and mail.
Who You are an eligible employee. When You can enroll and update your election any number of times between now and December 13, Your coverage will be effective on January 1, What You Need to Enroll. Already registered? Log in to your account to enroll. Who is eligible to enroll? I cannot change or revoke any of my elections: Until the next Open Season, when I can make a new election or choose not to elect.
Benefit Period I can only submit claims for reimbursement of eligible health care expenses that are incurred after my election is effective and until the end of the calendar year during which my election remains effective under the Plan.
Please note that insurance premiums are not FSA-eligible expenses. If you have children under 13 or are a caretaker of a parent or spouse, you may be eligible for a Dependent Care FSA. This uses the same concept as a medical FSA but allows you to use those tax-free funds on one of the most expensive services available: child care. The funds can also be used to provide care for an adult dependent who is physically or mentally unable to care for themselves.
Dependent Care FSA can help you save up to 30 percent on care costs. While insurance coverage is not required to be eligible for an FSA, it is possible for an FSA to be utilized in addition to coverage. So, if you know you have recurring medical expenses including regular doctor visits, an FSA alone may not be your best option, but combining an FSA with your insurance coverage can save you hundreds throughout the year.
As mentioned above, you typically have from November 1 to December 15 to create a game plan and enroll for the next year. Hospital Assn. Regional Meetings Hazmat Training. Go to www. If you need further assistance or require a paper enrollment kit, please call Railroad Enrollment Services at Monday-Friday, a. A negotiated benefit obtained in the National Agreement, the Health FSA lets you put pre-tax dollars deducted from your paycheck into a special account to help pay for eligible medical, pharmacy, dental and vision expenses.
When you enroll, you choose your FSA contribution amount. If the IRS raises the maximum in , you will be able to elect up to that amount.
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