The Employee Benefits & Executive Compensation attorneys at Chamberlain Hrdlicka represent public companies, large and closely-held private companies, tax-exempt organizations, and the fiduciaries who oversee those entities' employee benefit plans. We understand incentives in the workplace, and we stand ready with an integrated approach to help you deal with them.
From qualified retirement plans, to executive compensation, to fiduciary advice, to health and welfare programs, to mergers and acquisitions, to ERISA litigation, our broad experience helps companies answer questions in these areas of the law. A background in tax, securities, and fiduciary matters is our foundation. A common theme runs through our work in these areas: we specialize in representing employers in protecting their interests and maximizing tax advantages. We understand the work that goes into creating and maintaining incentives in the workplace, and we have the technical skills to help keep a company's employee benefit plans operating at peak efficiency.
At Chamberlain Hrdlicka, we stand with Boards of Directors, Compensation Committees, and the HR teams that serve those directors and committees, as they seek to provide a stable, productive environment for company executives and workers.
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Notice 2020-29 provides employers the ability to really help their employees through employer sponsored cafeteria plans with component spending arrangements.
This notice temporarily extends the claims period for flexible spending accounts for unused 2019 amounts through the end of 2020. However, this will cause an interesting administrative burden of trying to juggle extended 2019 claims for reimbursement while also processing 2020 claim. There is no clear guidance on how to handle this overlap and timing issues and we don’t see any further guidance coming out of the IRS/Treasury any time soon if ever.
Employers need to develop reasonable, nondiscriminatory policies and procedures to deal with the fact that plans will be leaving open the 2019 year, while also processing reimbursement requests for 2020. Employer’s should think about how do develop systems to figure out any carryover issues and how to deal with administering the carryover to 2020 when the employer is in the 2021 plan year. If lawmakers go through with some proposals, we could see this proposed extending FSA carryovers into the 2021 plan year. That will mean tracking 2019, 2020, and 2021 plan claims and carryover issues.
We recommend that employers permit the benefits provided under Notice 2020-29, however, a well thought out amendment to the plan that helps HR track the carryover issues will avoid operational errors that could cause bigger headaches down the road.