On November 9th, the IRS announced additional inflation adjustments for 2024, including to the annual contribution and carryover limits for healthcare flexible spending accounts and the monthly limit for qualified transportation fringe benefits. The IRS did not increase the annual contribution limit for dependent care flexible spending accounts because that limit is not indexed to

Updated November 15, 2022

On October 11, 2022, the IRS and the Treasury Department released final regulations relating to premium tax credit eligibility for families, along with companion cafeteria plan guidance in Notice 2022-41.[1]  The final regulations are expected to extend eligibility for premium tax credits to some dependents who were previously ineligible for

On October 18th, the IRS announced a slew of inflation adjustments for 2023, including to the annual contribution and carryover limits for healthcare flexible spending accounts and the monthly limit for qualified transportation fringe benefits.  The IRS did not increase the annual contribution limit for dependent care flexible spending accounts because that limit is not

You do not need a Lexis or Westlaw subscription to know that major cases and significant judgments have sometimes hinged on the meaning of a single word, or the placement of a single Oxford comma. We have a recent case to add to the list: Weinberg v. Waystar, Inc., et al., which was an

On Thursday, September 18, 2014, the Internal Revenue Service (“IRS”) released Notice 2014-55, which expands the cafeteria plan “change in status” rules to allow plans to offer employees an option to revoke their elections for employer-sponsored health coverage to purchase a qualified health plan through a Health Insurance Marketplace (“Marketplace”).   The notice is effective immediately and will appear in IRB 2014-41, to be published Oct. 6, 2014.

The notice addresses two specific situations in which a plan could allow an employee to revoke a cafeteria plan election (other than a health FSA election):  due to enrollment in the Marketplace; and due to a reduction in hours of service.  This should be a welcome relief to employers that may have been struggling with how to allow employees to change coverage from under the employer’s plan to a Marketplace or other group health plan.

Prior to the U.S. Supreme Court’s Windsor decision that repealed Section 3 of the federal Defense of Marriage Act (DOMA), same-sex spouses were not recognized as spouses for federal tax and benefits purposes.  In the immediate aftermath of Windsor, the Internal Revenue Service (IRS) issued Revenue Ruling 2013-17, which stated the IRS position that, for federal tax purposes, the term “spouse” now includes legally married same-sex couples regardless of whether their state of residence permits same-sex marriage.  As a result,  the value of employer-provided  health coverage  for a same-sex spouse would no longer be taxable under federal law, and employees could pay for the coverage on a pre-tax basis through an employer’s cafeteria plan.  Employees also could obtain reimbursement for same-sex spouses’ expenses under health care and other reimbursement plans.

On December 16, 2013, the IRS supplemented that guidance with the release of Notice 2014-1, written in Q&A format with examples.  Notice 2014-1 clarifies several issues for plan sponsors and administrators of cafeteria plans, flexible spending accounts (FSAs) and health savings accounts (HSAs).  First, it allows an employer to permit an employee to make a mid-year election change under its cafeteria plan with regard to health coverage for a same-sex spouse.  Second, it provides that an employee may be reimbursed from his or her health care FSA for expenses incurred by a same-sex spouse during the 2013 plan year, even before the date of the Windsor decision (but no earlier than the date of the marriage).  Third, it confirms that a same-sex married couple is subject to the joint limits applicable to married couples under HSAs and dependent care plans.