By Farshad Yashar (Partner)


Benefit elections under a cafeteria plan are, with limited exceptions, irrevocable and must be made by plan participants (employees) prior to the first day of the employer-plan year. Under a newly issued IRS notice (Notice 2020-29), for the 2020 plan year, the employer-sponsored plan may permit employees (who are eligible to make salary reduction contributions) to make mid-year changes:

  • With respect to employer-sponsored health coverage:
    • Make a new election on a prospective basis, if the employee initially declined to elect employer-sponsored health coverage;
    • Revoke an existing election and make a new election to enroll in different health coverage sponsored by the same employer on a prospective basis; and
    • Revoke an existing election on a prospective basis, provided that the employee attests in writing that the employee is enrolled, or immediately will enroll, in other health coverage not sponsored by the employer.

Additionally, Notice 2020-29 allows the employee participants to:

  • Revoke an election, make a new election or decrease or increase an existing election applicable to a health FSA on a prospective basis; and
  • Revoke an election, make a new election or decrease or increase an existing election regarding a dependent care assistance program on a prospective basis.


If you have any questions on the above, GHJ’s COVID-19 Response Team has as an experienced team of consultants specializing in COVID-related laws and programs and can provide the tools your business needs to help it recover from this business disruption. We are here to assist organizations to succeed in these very challenging times.