On May 12, 2020, the IRS issued Notice 2020-29 which relaxes some of the requirements pertaining to Section 125 cafeteria plans, specifically surrounding making mid-year changes to benefit elections. As you know, an employee’s benefit elections made as a new enrollment or during the annual open enrollment period are generally irrevocable in exchange for tax-favored status. Certain circumstances, known as Qualifying Life Events (QLEs), 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 QLE regulations are strictly enforced and Lehigh ensures that we comply with these rules in order to maintain the Flexible Benefits plan as a qualified Section 125 cafeteria plan.
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.
Among the changes being adopted are the following:
- You may elect to enroll in a Healthcare Flexible Spending Account (HCFSA) if you declined this coverage previously.
- You may reduce your HCFSA contribution limit if you are currently enrolled.*
- You may increase your HCFSA contribution limit if you are currently enrolled.
- 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.**
*The lowest amount your FSA may be decreased to is the greater of the amount you have contributed through the end of the month in which you submit your request, or the amount in which you have already been reimbursed from the account. For example: you originally elected to contribute $1200 annually, and have contributed $100/month through 5/31/2020. The lowest amount you may reduce your contributions to is $500. Alternatively, if you’ve already been reimbursed up to $800 from the account, you may reduce your contribution limit to $800.
**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.
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:
- 2020 Flexible Benefits Enrollment & Reference Guide
- High Deductible Health Plan Highlight Sheet
- Keystone HMO Plan Highlight Sheet
- PPO Plan Highlight Sheet
- PPO Plus Plan Highlight Sheet
Additional Important Considerations
Consider your choices carefully. You may only request changes to benefits as a result of the relaxed regulations once through the remainder of the plan year (through December 31, 2020). 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.
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: https://hr.lehigh.edu/benefits/QLE
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 COVID-19 Request to Change Benefit Elections Form and are subject to review by a Human Resources Representative. The relaxed regulations on requesting these changes will remain in effect through December 31, 2020. 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 firstname.lastname@example.org or leave a message at 610-758-3900.