IRS changes impact medical, dependent FSAs
Because of coronavirus, the IRS is now allowing mid-year changes with health insurance coverage and FSA plans.
Posted — Updated5 On Your Side's Monica Laliberte reports this is a big change. Typically, choices are made in the fall and they're locked in for the next year, unless there's a qualifying life event such as marriage, divorce or a baby.
Maybe there have been more medical costs than anticipated, or less. Maybe summer camp isn't happening and you budgeted for that with your pre-tax dollars.
The government recognizes the impact of COVID-19 on all of that end-of-year deduction planning.
Most health FSAs allow you to carry over a certain amount, but anything more, and any dependent care, until now was "use it or lose it."
Just know, this is the IRS giving the green light to employers to allow the changes. It's ultimately up to employers to accept the relaxed rules. Check with your Human Resources department for specifics.
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