Archive by tag: Section 125Return

What Benefit Changes Can I Make Due to COVID-19?

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Many employers are having to make difficult decisions regarding staffing during the national pandemic due to COVID-19. Employers are faced with staff leave of absence situations including layoffs, furloughs, and reduction in hours. This leads to questions regarding what changes employees are able to make to their benefits as a result.
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Categories: Benefits in General, Compliance | Tags: Permitted Election Changes , Section 125 , Health Care FSA , Dependent Care FSA , Transportation Plans
The IRS recently released an information letter addressing the treatment of cafeteria plan forfeitures when an employer ceases operations and the plan terminates. Specifically, the letter clarifies that Section 125 of the Internal Revenue Code does not require that unused cafeteria plan funds be paid to the U.S. Treasury in these circumstances. How unused funds are disposed of when a plan terminates depends on what the plan document provides and the facts and circumstances at the time.
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Categories: Benefits in General, Compliance | Tags: cafeteria plan , forfeitures , irs , information letter , health fsa , flexible spending account , Section 125