Required Updates to your Plan
EBSA Notice 2020-01 has, among other things, extended claims runout periods ending after March 1, 2020. The outbreak period – the National Emergency plus sixty days – extends the length of the runout.
For the sake of our examples below, the end of the National Emergency will be 06/30/2020
- A Plan Year ending 12/31/2019 with a sixty-day runout is not affected by the guidance. The runout ended 02/28/2020, before the effective date of the National Emergency.
- A Plan Year ending 12/31/2019 with a ninety-day runout is affected. Normally this would end 03/31/2020. However, it would instead end on 09/31/2020.
- Sixty days of the runout transpired before the National Emergency announced 03/01/2020
- The end of the emergency plus the required sixty days would be 08/31/2020
- The remainder of the runout (90 – 60 = 30) brings us to 09/30/2020
What does this mean for you?
Employees will be allowed to continue to submit claims for previous Plans Years until the end of the National Emergency is announced, at which time the final filing date will be updated.
Flyte HCM will be generating a Plan Document amendment for this required change at no cost to you. This will be uploaded to your document storage portal at https://portal.flytehcm.com.
Optional Updates to your Plan
The IRS Notices provide optional relief for Cafeteria and Flexible Benefit Plans. These allowable changes are OPTIONAL for employers. If you would like to make one or more changes to your Flexible Benefits Plan, please reach out to firstname.lastname@example.org.
Employer Action Items
- Review the options available and evaluate if you would like to implement plan changes.
- Notify all eligible employees and plan participants of any changes implemented and apply them uniformly.
- Amend the affected plan by December 31, 2021
If you would like to make one of the OPTIONAL changes below, an amendment to your Plan Documents is required. Flyte HCM is providing these limited amendments at a discounted fee per amendment.
FSA and Dependent Care changes are only applicable to the 2020 calendar year. With this optional change, employees may:
- Make a new election or stop an current election for pretax premium deductions for group health insurance
- Make any type of election change under a Health FSA
- Make any type of election change under a Dependent Care FSA
Note: Election changes cannot be made retroactively – only going forward.
Claims grace periods may be extended to reimburse expenses incurred during the remainder of 2020.
- If your plan ended 12/31/2019 and included a grace period, you may extend the grace period to 12/31/2020.
- If your plan ended on or after 01/31/2020, you may:
- Extend your existing grace period to 12/31/2020
- Add a grace period to your plan extending up to 12/31/2020 [For Plans ending in 2020 only, a Plan may include both a grace period and a rollover.]
Note: the extension of a grace period may affect Health Savings Account eligibility, if a participant has funds remaining in a Full Scope Health FSA and the end of a Plan Year or existing grace period.
The maximum Health FSA rollover, previously capped at $500, will be indexed annually beginning in 2020.
- In 2020, this maximum amount is $550.
- Plan sponsors may amend their plans beginning on or after 01/01/2020 to increase the maximum rollover amount to $550.
Additional Relief – No Action Required
- The IRS clarified that the exemption for HSA-eligible HDHPs covering telehealth and certain testing and treatment expenses related to COVID-19 may be applied retroactively to services back to January 1, 2020.
Our HR & Benefit Pros are ready to help
Need assistance or have any questions about this communication? Our team of HR & Benefit Professionals are ready to help you. Give us a call today or email Support@FlyteHCM.com