News & Analysis as of

New IRS Guidance May Require Amendments to Section 125 (“Cafeteria”) Plans

Many employers permit employees to pay for employer-sponsored health coverage, on a pre-tax basis, under Internal Revenue Code section 125 (“cafeteria”) plans. These plans generally require employees to make an irrevocable...more

Recent Employee Benefit Developments - October 2014

IRS Expands Cafeteria Plan Status Change Events - On September 18, 2014, the Internal Revenue Service issued Notice 2014-55, which establishes two new change in status events for cafeteria plans. The new change in...more

New ACA Rules Allow Employees a Second Trip Through the Cafeteria Plan Election Line

Under Notice 2014-55, the Internal Revenue Service (IRS) will now permit a cafeteria plan to allow an employee to revoke his election for coverage under the employer's group health plan in order to purchase a qualified health...more

IRS Expands Permissible Mid-Year Cafeteria Plan Elections

On September 18, 2014, the IRS issued Notice 2014-55, which expands permissible mid-year election changes under “cafeteria plans” to address two specific situations that have arisen in connection with the implementation of...more

The Affordable Care Act—Countdown to Compliance for Employers, Week 27: COBRA, Marketplace Coverage, Stability Periods, and...

Recent developments under the Affordable Care Act and COBRA, and existing rules governing mid-year election changes under cafeteria plans, have combined to make it challenging for certain terminating employees and those...more

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

Nondiscrimination Testing for Health and Welfare Plans

Some employee benefits enjoy a tax-favored status under the Tax Code, but such favorable tax treatment applies with respect to certain highly compensated individuals only if the plans satisfy applicable nondiscrimination...more

IRS Releases FAQs on Cafeteria Plan Benefits for Same-Sex Spouses Post-DOMA

The Internal Revenue Service has released a series of FAQs to answer several outstanding questions following the U.S. Supreme Court’s ruling in Windsor, which struck down Section 3 of the Defense of Marriage Act. The most...more

More Post-Windsor Guidance from the IRS Relating to Benefits for Same-Sex Spouses: Cafeteria Plan Changes, Flexible Spending...

Prior to the U.S. Supreme Court’s Windsor decision that repealed Section 3 of the federal Defense of Marriage Act (DOMA), same-sex spouses were not recognized as spouses for federal tax and benefits purposes. In the immediate...more

Connecticut Law Requires Employers to Adopt Cafeteria Plans

In 2007 Connecticut adopted a law requiring employers to adopt cafeteria plans if their employees are required to pay a portion of the health insurance premium for employer-sponsored health insurance through payroll...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

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

Cafeteria Plans: IRS Provides New Opportunities For Some Plans

The IRS recently issued guidance providing limited relief to the “use it or lose it” rule. Under the new guidance, employers may amend their cafeteria plan to permit participants to carryover up to $500 of unused...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

Section 125 Cafeteria Plan Requirement for Massachusetts Employers Ends

Massachusetts recently announced that, due to federal rules under the Affordable Care Act, it will cease enforcement of its Section 125 cafeteria plan requirement for Massachusetts employers. Under that requirement, employers...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

26 Results
|
View per page
Page: of 2