One of the common questions I’ve been hearing lately is “I planned for XXX expensive, semi-elective surgery this year. Due to COVID-19 that surgery can no longer be done in 2020.” Or “I planned for XXX expensive, semi-elective surgery this year. Due to COVID-19 I can’t have that surgery right now, and by the time patients are able to have surgeries again, my work area will be so busy that I won’t be granted leave to have it done yet in 2020.” Either then followed by “So what am I going to do about having signed up for large HCFSA contributions? I can’t roll over that much money into next year, and I can’t spend it this year!” In either case, as of yesterday, you’re in luck.

As we covered this fall in our Benefits series in preparation for Open Enrollment, each year your employer has an open enrollment period in which employees have to make their benefits elections (such as health care plan choice) that will be in place for all of the following year. There usually aren’t do-overs; if you elect a high deductible health care plan, and then get in a major car accident, you’re going to pay a higher out of pocket amount than if you’d elected non-high deductible plan.

But in this era of COVID-19, we have a special case. Just released yesterday by the IRS, mid-year benefits election changes may be made in 2020. Specifically employers can allow employees to make new elections in three areas.

• Electing to get coverage by an employer-sponsored health insurance plan, if the employee had initially declined it.
• Electing a new employer-sponsored health insurance plan.
• Electing to unenroll in an employer-sponsored health insurance plan (you have to be being enrolled in other health insurance, and document that in writing to your employer; there’s an example letter aka attestation in the IRS notice)
• Increase, decrease, stop, or start adding to a health care flexible spending account (HCFSA)
• Increase, decrease, stop, or start adding to a dependent care flexible spending account (DCFSA)

This is really appreciated temporary flexibility in cafeteria plan elections, IF your employer/”the plan chooses to permit“.

Now the question is whether your employer chooses to participate. Just like earlier this pandemic, when the IRS made it possible for high deductible health care plans to cover COVID-19 expenses as preventative (eg 100% at $0), many employers and plans did not choose to participate (it would be a higher cost to them). Time to pick up the phone and call HR if they aren’t being proactive about it.

There was a second IRS notice yesterday as well, about how much your HCFSA maximum carry-over will be allowed to be at the end of plan year. It had previously been $500. However this amount is indexed to inflation, and now will be revised to $550. So if you were putting off a medical procedure this year with plans to do it next year instead, and you can drop your HCFSA contributions, you may not need to drop those contributions quite as low.

Happy revising!