IRS Notice Announces Increased Flexibility

Updated: Jun 29

BCC's Benefits Compliance Team has been working diligently to provide ongoing guidance regarding the increased flexibility of certain plans following the COVID-19 outbreak. Since our May 14th, 2020 communication (available here), we would like to provide the following additional information on this topic.

Health Care FSA Plans and Dependent Care FSA Plans with a filing deadline occurring on or after March 1, 2020:

  • REQUIREMENT: Plan Sponsors are required to extend the Plan's filing deadline to the end of the National Emergency Period (i.e.: a calendar year FSA running from 1/1/2019-1231/2019 with a 3/31/2020 filing deadline).

  • OPTIONAL CHANGE: Plan Sponsors have the option to extend the period of time in which a person has to incur a claim through the end of 2020 if the FSA Plan Year or Grace Period ends within 2020.

Because the end date of the National Emergency Period continues to be unknown, BCC is temporarily extending your Plan's filing deadline to December 31, 2020. You do not need to take any action for this change to be applied. It will remain set for this date until further IRS guidance is released.

To assist in your strategy to communicate these changes to your affected participants, BCC has developed this template for your team to customize and distribute. Please edit as you see fit to accompany your communication strategy.

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