IRS sign on desk IRS Notice 2020-29 provided for increased flexibility with respect to mid-year elections for employer-sponsored health coverage, FSAs and DCAPs.

Many of the COVID-19 relief provisions included in the Families First Coronavirus Response Act (FFCRA), the Coronavirus Aid, Relief, Economic Security Act (CARES), and Internal Revenue Service (IRS) Notice 2020-29 were set to expire at the end of the 2020 calendar year. As infection rates continued to soar into the holiday season, employers and group health plan sponsors were left with no direction or guidance on how to organize their benefit offerings for the 2021 calendar year. This was especially troublesome for employers that sponsor benefits via a cafeteria plan, such as Health Care Flexible Spending Accounts (FSAs) and Dependent Care Assistance Programs (DCAP).

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