Q.- Is it true that we can allow our employees to make changes to their health and FSA benefits based on changes in circumstances due to COVID-19 related reasons?
A.- Yes. The IRS relaxed its cafeteria plan mid-year change rules for 2020. Now, plan sponsors may allow participants to change their pre-tax elections of health coverage and flexible spending account coverage. The IRS does not require the change to be limited to a COVID-19 related reason. However, for administrative purposes employers may want to place restrictions on the reason for changing elections and the number of times elections may be changed.
