As the year draws to a close, it is helpful for employers to pause and evaluate employee benefit plan amendment deadlines and other crucial fourth quarter benefit considerations, as described below.

Plan Amendment Deadlines

Many benefit plan changes must be amended by year end to reflect pandemic relief provisions implemented under the Families First Coronavirus Response Act (FFCRA), the Setting Every Community Up for Retirement Enhancement (SECURE) Act, and the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

CAFETERIA PLAN AND FSA PLAN AMENDMENTS FOR COVID-19 ELECTION CHANGE AND OTHER RELIEF.

With the COVID-19 pandemic came floods of Section 125 cafeteria plans and flexible spending accounts (FSA) guidance. These legislative acts and agency pronouncements allowed employers to pick and choose from a menu of relief, offering plan participants opportunities to change their coverage or FSA elections, carryover balances, have extended grace periods, and more. Employers who leveraged any of this relief must amend their Section 125 cafeteria plans and FSA plans by Dec. 31, 2021.

HEALTH FSA CHANGES – QUALIFIED MEDICAL EXPENSES.

The CARES Act amended the definition of a qualified medical expense to include over-the-counter medications without a prescription and menstrual products. Many FSA plans expressly exclude the reimbursement of over-the-counter drugs. Yet, many FSA administrators have already operationally implemented the CARES Act changes.

Employers should confer with their FSA administrators to determine whether the definition of qualified medical expenses in their FSA plans should be amended to reflect this change in the law. The amendment deadline to implement the change for the 2020 plan year is Dec. 31, 2021.

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