If your company offers health benefits, the plan you chose last fall may not be best for you now, in light of all the hardships employers and employees have faced the last few months. Luckily, the IRS announced in May their plan to allow employees to “add, drop or alter some of their benefits” for the remainder of the year…if your employer allows it. This will apply to both employers that buy health insurance to cover their workers and those that pay claims on their own. The IRS now permits benefits changes midyear due to the COVID-19 pandemic, but there is no way to determine how many companies will take advantage of the new IRS announcement. So, if you have questions for your company it never hurts to ask. Jay Savan of human resources consultancy Mercer says if you find yourself “economically strapped and [your] finances have changed…[you] may want to approach [your] employer and see if they’re planning to adopt any of these changes.
New IRS Announcement
The new guidelines are optional, employers do not have to allow their employees to switch insurance plans during this special enrollment period. But with the new IRS announcement comes many questions. There are different scenarios that may arise throughout this period that even employers may not have the answers to. It is important that you reach out to your provider or an insurance agent to learn all the details and what changes you can and cannot make. Here are two frequently asked questions provided by experts in the field.
I have put thousands of dollars into a flexible spending account to cover daycare, can I change that amount since the kids are home?
As with this entire process, your employer would have to allow you to make changes first. But, yes, the amount can be lowered now that you no longer require the service. However, you can also increase your “pretax contribution” in the event that you need to hire someone to watch your children while you work. At this time you can also establish a new account to cover dependent care expenses for 2020, employees are entitled to put up to $5,000 annually into a dependent care account to cover daycare or camp, etc.
I planned to use leftover FSA money on a medical procedure this year that had to be canceled, so I missed the deadline. What can I do?
Under the new guidelines, employers can choose to extend the grace period for using leftover FSA money from 2019 all the way through the end of 2020. They would normally have disappeared after the March 15 deadline. Similarly, employers can also allow employees to decrease or rescind their elected health care FSA amounts entirely. While employees cannot cash out on these leftover funds, they can use them on healthcare-related expenses, such as new glasses, if they have enough in their funds already. This part of the new guidelines seems to be the most intriguing to employers.
Empower wants to help you get the best insurance for your needs and the most for your money. We want to help you stay on top of your health.
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