Updated Plan Document Templates Available for Download on Flores DASH

Charlotte, NC – March 8, 2023 – On December 6, 2022, we notified Flores clients of IRS Notice 2022-41 that addressed the ACA premium tax credit "family glitch". This Notice expanded cafeteria plan status change events to permit employees to prospectively revoke their election under a group health plan mid-year (excluding Health Care FSAs) for family members who have enrolled or intend to enroll in Exchange coverage. The full text of the previous Flores release may be accessed here.

Plan Amendment Required

Employers that wish to adopt this new family member Exchange enrollment change event must communicate the change to participants and amend their cafeteria plan. The amendment must be adopted on or before the last day of the plan year in which the elections are allowed. The Notice provides that for a plan year beginning in 2023, an amendment may be adopted any time on or before the last day of the plan year beginning in 2024. The amendment can be retroactive to the first day of the plan year, but only if the plan has been operating in accordance with Notice 2022-41 as of the first day of the plan year.

Revised Template Plan Document Now Available on Flores DASH

Flores has revised plan document templates to include the new optional election change provision. The revised templates may be customized to serve as an amended and restated cafeteria plan document for those clients who wish to adopt the expanded status change event. Updated document templates are now available for administrators to download from the Document Library/Legal section of the Flores employer portal, www.flores247.com.

Summary:

• Flores amended the template Section 125 documents to include the Family Member Exchange enrollment event as an option that employers may adopt if they wish to incorporate the new status change event options outlined in Notice 2022-41 for election changes effective on/after January 1, 2023.


• The amended documents are now available for administrators to download from the Document Library/Legal section of the Flores employer portal, www.flores247.com.

Client Actions:

• If you wish to permit the family member Exchange enrollment status change option for your cafeteria plan, you will need to download and complete the revised templates located in the Document Library/Legal section of the Flores employer portal, www.flores247.com. You will then need to adopt the new set of documents as your amended and restated cafeteria plan.


• If you previously communicated to your participants that the new election change event would be available as of January 1, 2023, and you have operated your plan accordingly (i.e., by allowing such election changes), you would identify January 1, 2023, as the ‘Restatement Effective Date’ on page 1 (Number 5) of the Adoption Agreement.


• Likewise, if you communicated to your participants that the new election change event would be available as of a later date (such as February 1, 2023), and you have operated your plan accordingly, you would identify that later date as the ‘Restatement Effective Date’ on page 1 (Number 5) of the Adoption Agreement.


• If you have not yet communicated to your participants about the new election change event being adopted (and the date upon which it will be available), you will need to do so. In this case, the ‘Restatement Effective Date’ on page 1 (Number 5) of the Adoption Agreement would be the availability date you have communicated to your participants.

Read the IRS Release Flores DASH