The “use-it-or-lose-it” rules applicable to Cafeteria Plans were modified on Tuesday, May 17, 2005 when the U.S. Treasury Department and the Internal Revenue Service released Notice 2005-42. The new rules will allow plans to provide up to a 2½ month “grace period” (not to be confused with the plan’s “run-out” period) during which claims incurred during the new plan year could be reimbursed with money left over from the previous plan year. Although the use-it-or-lose-it rule has not been abolished and the new rules are “optional”, this modification does give participants a chance to access unused funds from the previous year, for up to an additional 2½ months, effectively creating a 14½ month plan year.
By attending this webcast, you will learn about intriguing issues and considerations that arise in evaluating these new rules, including:
- The specifics of the new rules
- Whether plan documents should be amended
- What type of language should be included in the plan document and SPD
- Whether these changes require distribution of a Summary of Material Modifications to participants
- Recommended changes to employee communications
- Suggested procedural changes for administering claims and reimbursements
- The impact of the new rules on your current run-out period
But that’s not all! The new rules also create separate issues relating to plan administration, employee communication, annual dependent care maximum reimbursement amounts, and coordination with HSAs and COBRA. For instance:
- Are dependent care benefits included in these rules and, if so, what are the implications for the statutory maximum annual reimbursement amount?
- How does the grace period integrate with the COBRA rules (e.g., are continuees always, never, or sometimes entitled to the grace period)?
- What COBRA premiums should be charged during the “grace period”?
- If an FSA participant elects a high deductible health plan for a new plan year, will the grace period impact HSA eligibility? Is the answer different if the participant does not have a remaining account balance at the end of the plan year or if the participant does not submit any expenses during the grace period?
- How do the new rules affect other reimbursement issues such as the use of Debit Cards and the uniform coverage rule?
Don’t miss this opportunity to learn about the new rules and requirements. Enroll today!
$189, payable by credit card or our “Create Your Invoice” option
Live: 06/14/2005 – 2:00pm Eastern to 3:30pm Eastern, or As a recorded Internet webcast, viewable as many times as you’d like until 09/14/2005
Go to http://hrtrainingcenter.com/showWCDetails.asp?TCID=1000562&RID=1000009
Please contact us at 770-410-1219