COVID-19 Resource

Welcome to P&A’s resource center for all COVID-19 related updates!

During this unprecedented time, P&A Group is here to support and help you navigate important benefit decisions. As legislation is passed and allowable changes are approved by the IRS, we will continue to keep you updated and informed.  Please continue to check here regularly for any new updates.

Under IRS Notice 2020-29, employers can allow for mid-year changes to employer-sponsored health care coverage, health FSAs and Dependent Care Accounts for 2020 calendar plan years.  This provision is also extended to 2021 plan years under the Consolidated Appropriations Act of 2021.

  • Employers may immediately allow participants in Health FSAs and Dependent Care FSAs to make changes to their elections including reducing or canceling their elections without the typically required change in life event, such as marriage or birth of a child.  Participants can also make a brand new election if none was made during Open Enrollment.  Important note: participants cannot cancel their election retroactively and receive a refund of their contributions.
  • The minimum new election amount for the Health FSA would be the greater of the claims paid year to date or the salary reduction contributions year to date. For employees who have spent more in their Health FSA than they have contributed, salary reductions would continue through the end of the plan year to fund the negative balance.

Action Required

The above change is not mandatory.  Employers who want to allow election changes must make an amendment to their plan no later than the last day of the first calendar year beginning after the end of the plan year in which the amendment is effective.

For example, if you have a calendar plan year and adopt this provision beginning January 1, 2021, the amendment will need to be completed by December 31, 2022.

Under IRS Notice 2020-29, employers can allow for mid-year changes to employer-sponsored health care coverage, health FSAs and Dependent Care Accounts for 2020 calendar plan years.  This provision is also extended to 2021 plan years under the Consolidated Appropriations Act of 2021.

  • Employers may immediately allow participants in Health FSAs and Dependent Care FSAs to make changes to their elections including reducing or canceling their elections without the typically required change in life event, such as marriage or birth of a child.  Participants can also make a brand new election if none was made during Open Enrollment.  Important note: participants cannot cancel their election retroactively and receive a refund of their contributions.
  • The minimum new election amount for the Health FSA would be the greater of the claims paid year to date or the salary reduction contributions year to date. For employees who have spent more in their Health FSA than they have contributed, salary reductions would continue through the end of the plan year to fund the negative balance.

Action Required

The above change is not mandatory.  Employers who want to allow election changes must make an amendment to their plan no later than the last day of the first calendar year beginning after the end of the plan year in which the amendment is effective.

For example, if you have a calendar plan year and adopt this provision beginning January 1, 2021, the amendment will need to be completed by December 31, 2022.