Employers Can Let Workers Change Health Plans Without Waiting
The I.R.S. is giving companies flexibility to allow those decisions, and on pretax accounts for medical expenses and child care, outside an enrollment period. New guidance from the Internal Revenue Service will allow companies to give workers more flexibility because of the coronavirus outbreak.Credit…Ting Shen for The New York Times
The Internal Revenue Service on Tuesday made it easier for employers to allow workers to make adjustments to their health insurance plans and flexible spending accounts in response to the coronavirus pandemic.
The changes could make it easier for workers who are furloughed to drop benefits temporarily and resume them when they return to work. They may also be attractive to workers who decided against buying health insurance earlier in the year but feel different now that they are worried about their risk of catching the coronavirus.
Cynthia Cox, a vice president at the Kaiser Family Foundation, a health research group, said employers might want new flexibility as a way of encouraging reluctant employees to return to work during the pandemic.
“I can imagine being an uninsured worker and being hesitant about returning to work and exposing myself to the virus without having health insurance,” she said.
Under the new guidance, employers will also be able to allow workers to make changes to pretax flexible spending accounts that pay for health expenses and dependent care.
Employers may also offer exceptions on rules for rollovers. For instance, people who had money left over from a plan that ran on the 2019 calendar year may be able to get the rest of this year to spend it. Other plans that normally end their 12-month spending period in May or June could get the same extension.The new guidance does not allow for extensions for flexible spending accounts that began their year in January. People in those accounts can, however, halt their savings now, in most instances, and try to spend what they’ve accumulated so far before they must forfeit it next year.
Since 1954 Hiller Inusrance has focused on providing legal services related to healthcare reform and employee benefits.