SW Benefits Update - COVID-19 and Cafeteria Plans: To Amend or Not to Amend?
June 22, 2020
By Allison B. Bans
On May 12, the IRS issued Notice 2020-29 “COVID-19 Guidance Under Section 125 Cafeteria Plans and Related to High Deductible Health Plans” and Notice 2020-33 “Section 125 Cafeteria Plans – Modification of Permissive Carryover Rule for Health Flexible Spending Arrangements and Clarification Regarding Reimbursements of Premiums by Individual Coverage Health Reimbursement Arrangements.” As explained in more detail below, Notice 2020-29 provides increased flexibility for cafeteria plans in response to the COVID-19 pandemic and Notice 2020-33 increases the health flexible spending arrangement (“Health FSA”) carryover limit and clarifies the ability of a health plan to reimburse individual insurance policy premium expenses incurred prior to the beginning of the plan year.