News & Analysis as of

New Guidance For Cafeteria Plans, FSAs and HSAs

In June 2013, the Supreme Court held unconstitutional a federal law requiring only opposite-sex marriages to be recognized for federal law purposes. The Internal Revenue Service ("IRS") issued initial guidance in September...more

The ERISA Litigation Newsletter - January 2014

This month we look at part three of our three part series on Class Actions. In part three, Robert Rachal and M. Todd Mobley address the role of experts in class certification post Wal-Mart and Comcast and how to use and...more

Year-End Health and Retirement Plan Guidance Grab Bag

Following Hawaii’s enactment of legislation recognizing same-sex marriage as of and after December 2, 2013 a number of additional pieces of guidance were also issued. Internal Revenue Service’s Frequently Asked Questions...more

More IRS Guidance on Cafeteria Plan, FSA, DCAP and HSA Administration Post-Windsor

In Notice 2014-1, the IRS has provided additional guidance for cafeteria plans (including health and dependent care flexible spending accounts) and Health Savings Accounts on compliance with the changes to treatment of...more

IRS Releases Q&A on Elections and Reimbursements in Cafeteria Plans Post-DOMA

On December 16, the IRS released Notice 2014-1, providing additional guidance on administration of employee benefit plans in light of the Supreme Court’s June 26, 2013 decision in United States v. Windsor. Windsor invalidated...more

Latest Post-Windsor Guidance from IRS Addresses Issues for Cafeteria Plans, Flexible Spending Accounts, and Health Savings...

In its latest addition to guidance concerning the effects of the U.S. Supreme Court's decision in United States v. Windsor, the Internal Revenue Service ("IRS") has issued Notice 2014-1 to address certain issues relating to...more

At Year End, IRS Issues Guidance On Cafeteria Plan Transitional Rules For Windsor

Finally, some guidance on mid-year cafeteria plan changes that many employers have already permitted in the wake of United States v. Windsor. On December 16, 2013, the Internal Revenue Service (IRS) released Notice 2014-1,...more

Employee Benefits Update: 2013 Year End Plan Tasks

As we approach the end of the year, employers and plan sponsors of qualified retirement plans and health and welfare plans should take time to meet various upcoming deadlines. Failure to comply with the deadlines may result...more

New Rules Allow Cafeteria Plans To Carryover Up To $500 Of Unused Health FSA Money To The Next Plan Year

Under new IRS guidance, an employer may amend its cafeteria plan to allow for up to $500 of unused amounts remaining in a health flexible spending account (FSA) at the end of a plan year to be carried forward to reimburse...more

IRS Provides FSA "Use-or-Lose" Rule Relief

The Internal Revenue Service (IRS) has recently issued guidance providing a modicum of relief to the forfeiture requirements for flexible spending accounts (FSA) under a Section 125 (or “Cafeteria”) Plan. FSA’s are utilized...more

IRS Changes Health FSA "Use-or-Lose" Rule; Clarifies Transition Relief for 2013-14

On October 31, 2013, the Internal Revenue Service (IRS) released Notice 2013-71 (Notice), which modifies the "use or lose" rule for health flexible spending accounts (health FSAs) to allow a $500 annual carryover of unused...more

IRS Modifies Health FSA "Use or Lose" Rule

On October 31, the IRS issued Notice 2013-71, modifying the long-standing “use or lose” rule for health flexible spending arrangements (FSAs). Under the new rule, employers may permit health FSA participants to carry over up...more

IRS Modifies 'Use-or-Lose' Rule for Health FSAs

IRS Notice 2013-71 recently modified the longstanding "use-or-lose" rule for health flexible spending arrangements (FSAs) so that covered individuals may now be permitted to carry over up to $500 in unspent funds in their...more

IRS Modifies “Use-It-Or-Lose-It” Rule for Health Flexible Spending Arrangements under Cafeteria Plans

On October 31, the IRS modified the “use-it-or-lose-it” rule for health flexible spending arrangements, allowing up to $500 of unused amounts to be carried forward and used for payment or reimbursement of qualified medical...more

Important Changes Relating to Section 125 Plans May Require Immediate Action

Last week, there were two important developments relating to Section 125 cafeteria plans. First, Massachusetts announced that employers will no longer be required to maintain a Section 125 plan. Second, the IRS has modified...more

IRS Liberalizes the "Use-It-or-Lose-It" Rule for Flexible Spending Accounts and Offers Other Transition Relief

In Notice 2013-71 (the “Notice”), the Internal Revenue Service (the “IRS”) has modified the so-called “use-it-or-lose-it” rule for health flexible spending accounts (“FSAs”) under cafeteria plans to allow participants to...more

IRS Relaxes Use-or-Lose Rule for Health FSAs

On October 31, 2013, the Internal Revenue Service (“IRS”) issued guidance relaxing the Use-or-Lose Rule applicable to Health FSAs under employers’ cafeteria plans. Now an employer may amend its cafeteria plan to permit plan...more

Health Flexible Spending Accounts – Modification Of "Use It Or Lose It" Rule

Many employers offer health flexible spending account arrangements ("Health FSAs") through cafeteria plans to their employees. Historically, Health FSAs have been subject to a "use it or lose it" requirement, meaning that...more

IRS Chips Away at the FSA "Use-or-Lose" Rule

Health care flexible spending accounts ("FSAs") established pursuant to a cafeteria plan under Section 125 of the Internal Revenue Code of 1986, as amended, have long permitted employees to make pre-tax salary contributions...more

IRS Announces New Health FSA Carryover and 2014 Benefit Plan Limits

The U.S. Treasury Department and the Internal Revenue Service (IRS) have announced updated guidance permitting carryover of up to $500 of unused health flexible spending account (FSA) balances at the end of a plan year....more

IRS Publishes New Cafeteria Plan Rule

The IRS handed healthcare flexible spending account participants an early Christmas present on Halloween when it modified cafeteria plan "use-it-or-lose-it" rules so that $500 can be carried over from one year to the next in...more

The Affordable Care Act Creates Compliance Challenges For HRAs And Other Arrangements

On September 13, 2013 the U.S. Department of the Treasury (IRS), the U.S. Department of Health and Human Services (HHS), and the U.S. Department of Labor (DOL), collectively referred to herein as the Departments, coordinated...more

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