Employers that implemented the optional, temporary relief for cafeteria plans provided under the Consolidated Appropriations Act, 2021 (CAA) and IRS guidance must adopt plan amendments by Dec. 31, 2022. As a reminder, employers are permitted to retroactively amend their cafeteria plans for this temporary relief, so long as:
During 2020 and 2021 plan years, the CAA provided flexibility for health flexible spending accounts (FSAs) and dependent care assistance programs (DCAPs) with respect to the following:
The CAA and IRS guidance allowed employees to make prospective mid-year election changes even if they had not experienced a change in status. IRS Notice 2021-15 clarified that employers could decide how long to permit mid-year election changes with no change in status during the plan year, and could limit the number of election changes during the plan year that were not associated with a change in status.
Calendar Year Plans: The amendment adoption deadline of Dec. 31, 2022 applies to changes for the 2021 plan year for calendar year plans. The amendment adoption deadline for the 2020 plan year was Dec. 31, 2021.
Non-Calendar Year Plans: The amendment adoption deadline of Dec. 31, 2022 applies to changes for the 2020 plan year for non-calendar year plans. For the 2021 plan year, non-calendar year plans have until Dec. 31, 2023 to adopt the amendments.
Employers are permitted to retroactively amend their cafeteria plans so long as the amendment is adopted by Dec. 31, 2022.
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