Section 125 cafeteria plan elections are irrevocable for the plan year unless the participant experiences a change in status or other event that allows an election change under the Section 125 regulations. Common status change events that may be occurring due to the pandemic include the following: A commencement of an unpaid leave of absence. …
Benefits Briefs in the Time of COVID-19, Part 4: Reimbursement of Over-the-Counter Medications
Congress has reversed course and amended the Internal Revenue Code (“Code”) to provide that a health flexible spending account (“health FSA”), health savings account (“HSA”) and health reimbursement account (“HRA”) may reimburse employees for over-the-counter medications, effective January 1, 2020. Background For many years, health FSAs, HSAs and HRAs did not consider a non-prescription drug …
Benefits Briefs in the Time of COVID-19, Part 2: Temporary Expansion of Educational Assistance Programs to Cover Employees’ Student Loan Debt
The CARES Act gives employers a way to pay employees’ student loan debt on a pre-tax basis during a portion of 2020 through an educational assistance program under Section 127 of the Internal Revenue Code (“Code”). Overview of an Educational Assistance Program Under a Section 127 educational assistance program, an employer may pay or reimburse …
High Deductible Health Plans and Expenses related to COVID-19
Many of the nation’s largest insurers have announced that they will be waiving the deductible or other cost-sharing for testing or other expenses related to the 2019 Novel Coronavirus (“COVID-19”). Plan sponsors that offer coverage to employees through a high deductible health plan (“HDHP”) asked whether this waiver would affect the health plan’s status as …
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Changes Affecting Employer-Sponsored Health Plans in the 2020 Appropriations Act
The 2020 appropriations act, which was signed into law by the President on December 20, 2019, contains a mix of good and bad news for employer-sponsored health plans. On the good news side of the ledger, several taxes imposed by the Affordable Care Act have been repealed, as follows: To literally no one’s surprise, the …
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High Deductible Health Plans Allowed to Provide Additional Preventive Care Benefits for Individuals with Chronic Conditions
A high deductible health plan (“HDHP”) is not permitted to pay for medical expenses until the plan’s deductible has been satisfied, with the exception of medical expenses incurred for preventive care. Preventive care did not generally include expenses for any service or benefit intended to treat an existing illness, injury or condition. In a welcome …
Association Health Plans: Still Viable?
The Department of Labor (“DOL”) issued final regulations in June 2018, which loosened the DOL’s long-standing sub-regulatory guidance and allowed more organizations to form Association Health Plans (“AHPs”). The impetus for issuing the regulations was to provide another option for small employers to have access to affordable, high quality health care. AHPs would allow small …
Surprise! A QDRO Can Apply to a Welfare Benefit Plan
Most plan administrators are familiar with a qualified domestic relations order or “QDRO,” which is used to split retirement plan benefits between a plan participant and an alternate payee, such as an ex-spouse or minor child. Even an experienced plan administrator may not be aware that a QDRO can also apply to a welfare benefit …
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Determining Eligibility for the Employer Credit for Paid Family and Medical Leave
Section 45S of the Internal Revenue Code (“Code”), added to the Code by the Tax Cuts and Jobs Act of 2017, establishes a general business credit for an employer who provides paid family and medical leave to qualifying employees. The credit would partially offset the cost of the paid leave, however, it is available only …
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Innovative 401(k) Plan Benefit for Employees with Student Loan Repayments
Many recent college graduates find it difficult to make contributions to their employer’s 401(k) plan as they have significant student loan repayments which take precedence in their budget. By failing to make 401(k) deferrals, these employees may miss out on employer matching contributions as well as earnings on the deferrals and match. The IRS has …
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