IRS Guidelines Regarding COVID-19 Plan Coverage
According to new IRS guidelines, during the period between January 1 and December 31, 2020, an employer offering fully insured or self-funded health plan coverage may amend one or more of its cafeteria health plans to allow employees to do the following on a prospective basis...
- choose to make a new election for employer-sponsored health coverage if they initially declined
- revoke an existing election and make a new election to enroll in different health coverage sponsored by the same employer (e.g., switching from a PPO to an HMO plan)
- completely revoke an existing election for employer-sponsored health coverage and attest in writing that they are enrolled, or will immediately enroll in other health coverage
- revoke an election, make a new election, or decrease or increase an existing election regarding a health flexible spending account (FSA)
There is also increased flexibility with FSA grace periods for plan years ending in 2020 to apply unused FSA money to medical care expenses incurred through December 31, 2020.
Recent federal guidance provides a temporary safe harbor for HDHPs to cover COVID-19 treatment, testing and related expenses, and telehealth services prior to a plan deductible or with a reduced deductible without disqualifying the member from making Health Savings Account (HSA) contributions. This safe harbor applies to reimbursements of expenses incurred on or after January 1, 2020.
Employers should check with their legal resources or tax consultants for complete details. You can also view the detailed notice from the IRS.