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Dec 2020
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December 22, 2020

Stimulus Bill Provides New Relief for FSAs; Other Developments for Health & Welfare Plans

Just in time for Christmas, Congress passed the Consolidated Appropriations Act, 2021 (CAA). Here’s a quick update on some recent legal developments affecting health and welfare plans.
 
FSA Relief
 
Under the CAA, employers sponsoring flexible spending account (FSA) programs may elect to adopt some or all of the following changes: 

  • Health FSAs and dependent care FSAs may allow any remaining balances at the end of plan years ending in 2020 and 2021 to roll into the following plan year.

  • Health FSAs and dependent care FSAs may extend grace periods for plan years ending in 2020 and 2021 to up to 12 months.

  • Health FSAs may allow employees who terminate participation during 2020 or 2021 to spend down unspent balances through the end of the plan year (similar to what is already permitted for dependent care FSAs).

  • Dependent care FSAs may extend the age limit for qualifying children from 13 to 14 for a plan year for which open enrollment ended before January 31, 2020, and for any unspent funds from that plan year that are available (either by rollover or grace period) to the employee during the following plan year.

  • Health FSAs and dependent care FSAs may allow prospective election changes during 2021 without regard to any change of status requirements.

Employers electing to adopt any or all of these changes may implement them immediately and then amend their plan documents in the following calendar year. Employers should also talk with their FSA administrators to ensure that they’ll be able to administrator the changes.

COVID Vaccination Coverage as Preventive Care

Earlier this year, the Coronavirus Aid, Relief and Economic Security Act (CARES Act) required that health plans cover, without cost-sharing, any COVID-19 vaccinations within 15 business days after the vaccination received a recommendation by the Advisory Committee on Immunization Practices (ACIP) that was approved by the Director of the Centers for Disease Control and Prevention (CDC). The Director of the CDC approved ACIP recommendations for the Pfizer-BioNTech vaccine on December 13, 2020, and the Moderna vaccine on December 20, 2020. Employers who sponsor group health plans should verify that their insurers or third-party administrators are prepared to cover these expenses without cost sharing within 15 business days of the approval dates.

Surprise Medical Billing

The CAA also includes the No Surprises Act, which protects individuals from surprise medical bills from out of network health care providers—including air ambulance services. This law supplements state surprise billing legislation, which cannot protect individuals covered under self-insured plans because of ERISA preemption. The law does not go into effect immediately, and Warner will be providing updates as regulations are released to implement its provisions.

If you need any assistance with plan amendments or have questions about these new developments, please contact Norbert Kugele, Stephanie Grant or any other member of Warner’s Employee Benefits/Executive Compensation Practice Group.

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