December 31, 2014 Deadline Looms for Many Section 125 Plan Amendments
On September 18, 2014, the IRS released IRS Notice 2014-55, which now allows employees to make certain mid-year health coverage changes when they reduce below 30 hours of service or enroll in a qualified health plan through a Marketplace. Employers who want to permit either of these two new changes (which are explained in detail in the Notice, so I will not repeat them here) must amend their Section 125 plans by the end of the plan year in which the changes are allowed. However, a special rule applies to plans that permit changes during the 2014 plan year. Such plans must be amended by the last day of the 2015 plan year (i.e., December 31, 2015 for calendar year plans).
In addition to these two new changes, there are numerous other changes, many of which need to be reflected in Section 125 plan documents on or before December 31, 2014.
Check out my newsletter, When Did You Last Amend Your Section 125 Cafeteria or Flexible Benefit Plan? Now May Be A Good Time to Dust It Off and Update It, for a list of recent Section 125 plan amendments that employers may need to make to their Section 125 plans before the end of the year.