Each year, employers are faced with a number of year end deadlines related to employee benefits as well as new requirements facing them in the coming year. This article is meant to provide a brief summary of those issues.

• Cafeteria Plan Considerations:
  • Health and Dependent Care FSA Carryover, Grace Period, and Election Changes. The Consolidated Appropriations Act, 2021 (CAA), IRS Notice 2021-15, and the American Rescue Plan Act of 2021 (ARPA) allowed employers to implement various optional changes to their Section 125 cafeteria plan. Such changes included expansion of health and dependent care FSA carryovers and grace periods, modification to election change events, temporary increase to the dependent care age limit, etc. Because such changes must be adopted by an amendment by the end of the first calendar year beginning after the end of the plan year in which the amendment is effective, any changes impacting the plan year in 2020 must be adopted by December 31, 2021. Employers must also operate their plans in accordance with the amendment’s terms beginning on its effective date and inform eligible employees of the changes.
  • Qualified Medical Expenses. The CARES Act provided for new qualified medical expenses to be reimbursable under a cafeteria plan’s health FSA as early as January 2020. Such new expenses include over-the-counter medications without a prescription and menstrual products. Amendments to provide for these changes that may have been implemented in 2020...

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