Section 125 IRS Changes

ATTENTION!!  Any groups that are currently set up to take advantage of Section 125 for areas of their health plan:

The IRS has issued a bulletin 2020-29 that will allow group health plans to allow employees to make mid-year changes to Section 125 elections.  These changes are not mandatory. 

Below is a summary:

  • Employees who declined coverage may enroll in their employer sponsored plan.
  • Employees can add or drop family members.
  • Employees could drop coverage completely if they prove that they are enrolled in comprehensive coverage.
  • Section 125 elections may be changed for any reason. These would include both Flexible Spending Arrangements (FSA) and Dependent Care Reimbursement Arrangements (DCA).

The IRS Notice may be found at:  https://www.irs.gov/pub/irs-drop/n-20-29.pdf