Human Resources
Finance & Administration

2021 Guidance on IRS Notice 2021-15 for Flex Benefit Plans

You are here

 

The IRS recently issued Notice 2021-15 in an effort to clarify the application of Section 214 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020, recently enacted as part of the Consolidated Appropriations Act. This notice also relaxes some of the requirements pertaining to benefits plans such as Lehigh’s which are known as Section 125 cafeteria plans, specifically with regard to making mid-year changes to benefit elections.

As you may know, in exchange for tax-favored status, an employee’s benefit elections made as a new enrollment or during the annual open enrollment period are generally irrevocable for the remainder of the plan year. Certain circumstances, known as Qualifying Life Events (QLEs), only permit changes to elections that are consistent with the event itself (for example, you may add a new dependent to your plan after birth or adoption). 

The relaxed regulations provide more flexibility to participants in a cafeteria plan, allowing an employee to revoke an election and make a new election without a QLE. While employers are not mandated to adopt any of the relaxed regulations, Lehigh has determined that adopting some of these changes will be in the best interest for our faculty, staff and their families. 

Changes Adopted by Lehigh

Among the changes permitted in Notice 2021-15 being adopted by Lehigh University are the following:

  • If you waived medical insurance through Lehigh previously, you may enroll in a plan at this time.

  • If you are currently enrolled in a medical plan and would like to waive your coverage to obtain coverage through an external source, you may do so.

  • If you are currently enrolled in a medical plan and would like to switch to a different medical plan, you may do so.

  • If you are currently enrolled in a medical plan and would like to change your coverage level by adding or removing dependents, you may do so.

  • You may reduce your HCFSA and DCFSA contribution limit if you are currently enrolled and will have additional carryover from the 2020 plan year as permitted by the Consolidated Appropriations Act. See below for more information.**

*There are many considerations to keep in mind when changing your medical plan. For example, the lowest cost plan in terms of monthly premiums may actually be the most expensive plan for you and your family when you need to seek medical care. Alternatively, a medical plan that costs more per month does not always equate to being the most cost-effective plan for your specific needs. In addition, any amounts applied to your deductible (if your current plan election has a deductible) will not be applied to another health plan election with a deductible. You are responsible for satisfying the full deductible under the new plan election.

**Available to participants through April 15, 2021 who had a 2020 Healthcare FSA and 2020 DC FSA as a result of the expanded carryover provisions enacted by the Consolidated Appropriations Act. Please see here for more information.

 
    Lehigh Medical Plan Options

    Please refer to the following resources on Lehigh’s medical plan options to help determine which plan may best suit your and your families’ needs:

     
    Additional Important Considerations
    • You may only request these changes if you are already eligible for the relevant benefit.

    • Consider your choices carefully. You may only request changes to benefits as a result of the relaxed regulations once through October 31, 2021. All additional changes must only be made with a QLE or during open enrollment.

    • All requests for changes, if approved, will become effective on the first day of the month following the date your request is received by Human Resources and will remain in effect through the remainder of the plan year (through December 31, 2021).

    • Any changes not listed above or on the request form will be reviewed in conjunction with the standard QLE guidelines. As such, events like the birth of a child, marriage, loss of coverage through a spouse or partner, etc. will continue to be reviewed and processed in accordance with QLE guidelines that are already in place. For more information on QLEs, please visit the QLE information page on the HR website.

     

    How to Request a Change
    • Any changes you wish to request in relation to these relaxed regulations must be submitted in writing via a completed 2021 COVID-19 Request to Change Benefit Election Form and are subject to review by a Human Resources Representative.
    • The relaxed regulations on requesting these changes will remain in effect through October 31, 2021.
    • If you have questions regarding these changes, are not sure if your change should be processed under the new regulations or as a standard QLE, or would like additional information, please contact Human Resources at inben@lehigh.edu or leave a message at 610-758-3900.