Niels Christiansen
Niels Christiansen has served as President and Owner of ABY Benefits, LLC, a DFW based TPA for the alphabet soup of the tax code, for more than 10 years. He graduated from Regis University in Denver, CO with a Master’s Degree in Operations Management and International Business, and in 2018, he completed his SPHR certification. Niels has led ABY to exponential growth through a combination new business sales, multiple mergers and acquisitions as well out of the box thinking and new product development.
Niels and ABY’s focus is to help promote easy to understand benefit compliance as it relates to Section 125 POP/FSA, Section 105 HRA, Section 132 Qualified Transit Benefits, HSA, ERISA and COBRA plans.
FAQs for Section 125 Plan Changes Amid COVID19
Q: Can an Employer allow Section 125 election changes amid COVID19?
A: While no new guidance from the IRS regarding election changes, however there are several statues allowing for changes. In order for a change to made, a Qualifying Event (QE) must have taken place. The first place to look for allowable QEs is the Plan Document governing the plan.
Q: What is considered a Qualifying Event under Section 125?
A: The IRS standard QEs include: • Defined in Plan Document – updates allowed o Eligibility / rehire requirements o FSA / Daycare claim submission periods • Birth / death / adoption / marriage / divorce • Reduction in hours / significant pay change • Significant cost change • Termination / layoff / furloughs / job change • Spousal / exchange open enrollment
Q: Is COVID19 a QE under Section 125?
A: The mere presence of OR contracting COVID19 is not QE under Section 125, however much of the fallout from will lead to a QE. For example, employees experiencing a layoff or reduction in hours or children no longer being allowed to attend schools may have experienced a QE allowing for certain election changes. Many insurance carriers are allowing special enrollment periods, but this is not a QE under Section 125.
Q: What elections can be changed?
A: Most pretax deductions may be changed if you experience a true QE and those changes must be consistent with the QE. Changes can include premium deductions, Daycare FSA deductions, Qualified Transit Benefit deductions and in very limited cases Medical FSA deductions. As before, HSA deductions may also be changed.
Q: What insurance premiums can be changed?
A: If due to a true QE, an employee adds, drops or changes coverage, pretax insurance premium deductions can be added, changed or stopped. If due to a carrier special enrollment period amid COVID19, an employee adds, drops or changes coverage, pretax insurance premium deductions CANNOT change. This includes premium for newly enrolling a spouse or dependent.
Q: When can Daycare and Medical FSA election be changed because of COVID19?
A: With Daycare FSA, there several QEs created as a result of COVID19. A large number of schools and daycare providers are closed, which creates a significant cost change for parents as does a reduction of hours or partial furlough or layoff, all of which then allows for election changes. On the other hand, Medical FSA deductions are not as simple and it seems that without more clear guidance, making changes is not allowed. Some QEs may apply but in general, Medical FSA elections cannot be changed due to COVID19.
Q: When can Qualified Transit Benefit election changes be made?
A: The section 132 Qualified Transit Benefit (QTB) elections can be changed with a QE such as a significant cost change as a result of the stay at / work from home orders or at the end of the Plan Period, which is typically a calendar month and is defined in the Plan Document. Making changes to QTB deductions due to COVID19 is very simple.
Q: Are over-the-counter and Feminine Hygiene now FSA and HSA eligible?
A: For both FSA and HSA, over-the-counter (OTC) items and feminine hygiene products are now fully eligible items effective January 1, 2020. ABY is ready to accept and process all OTC and feminine hygiene claims immediately and we anticipate Debit Cards to be ready within the next few weeks. It has been suggested by SIGIS, the entity responsible for coding eligible items, that the more than 19,000 new items will be ready midApril. Your FSA and HSA debit card will accept these new items as soon as SIGIS and eligible merchants make the update to their systems.