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IRS Confirms Removal of Non-Calendar-Year Plan Limitation from October 2022 Additional Election Change Guidance



IRS Announcement 2022-22, 2022-47 I.R.B. 497

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We recently reported on IRS Notice 2022-41, under which cafeteria plans can be amended to allow prospective midyear group health plan election changes from family coverage to employee-only coverage (or family coverage including one or more already-covered related individuals) so that one or more family members can enroll in a qualified health plan through an Exchange (see our Checkpoint article). We noted that while the guidance initially had applied only to non-calendar-year plans, the IRS later posted a revised version of the guidance without the non-calendar-year plan limitation. (No other substantive changes were made.) The IRS has now issued an announcement confirming that the guidance has been amended to delete the “non-calendar-year” reference and applies to any cafeteria plan.

EBIA Comment: The new family member Exchange enrollment event is optional, but cafeteria plan sponsors—regardless of their plan year—will appreciate having the flexibility to offer it under their plans. Although plan amendments may be adopted retroactively as provided in the guidance, election changes to revoke coverage on a retroactive basis are not permitted. For more information, see EBIA’s Cafeteria Plans manual at Section XIV (“When May Participant Elections Be Changed?”), which will be updated for the guidance. See also EBIA’s Health Care Reform manual at Section XXI.G (“Premium Tax Credits”).

Contributing Editors: EBIA Staff.

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