IRS Permitting Mid Year Changes to Medical Plans/HSA & FSA Contrinutions

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I’m confused. Couldn’t you already change HSA contribution amounts at any time, or did I do an oopsie?!


I work as an employee benefits consultant for companies and generally my clients haven’t shown much interest in letting people change medical plans. The bigger the employer, the more hassle it is. Most employees aren’t savvy enough to know why they might want to change plans, and if the employer has a wave of people joining the plan with the best coverage, it could cost them massive amounts of money. I am seeing a lot of employers allow changes to FSA/DCFSA and I am seeing A LOT of employees make changes to those. As for HSAs, you are always allowed to make changes to your contribution at any time, just like a 401k. What really needs to be pushed out to employees is the expansion of eligible expenses for HSAs and Medical FSAs. The biggest expansion is OTC drugs WITHOUT a prescription. Also feminine period supplies. Those things add up and are eligible reteoactively any time after 1/1/2020.


Please note my tone here is not accusatory. We’re your employees advised that they could take out 401k hardship distributions tax and penalty free? Or that they could suspend their 401k loan payments? Or that you could convert any IRS tuition reimbursement to instead reimburse student loan payments, tax free, up to $5250? If they don’t know what possible options/changes are on the table, they may not have so quickly said, “no, we’re good.” These programs have had tremendous use and support at my organization. Granted, we’re about 6000 strong.


I’m in charge of benefits for my company and we polled our employees on their satisfaction with their benefit selection during Covid and 100% don’t want to make changes.


Thank you for this. I work for a large health care corporation and had budgeted my FSA to do weekly PT for my lower back. Of course, that didn’t happen (PT was closed). I’d love to stop my FSA.