IRS Allows Benefits Changes

If your company offers health benefits, the plan you chose last fall may not be best for you now, in light of all the hardships employers and employees have faced the last few months. Luckily, the IRS announced in May their plan to allow employees to “add, drop or alter some of their benefits” for the remainder of the year…if your employer allows it. This will apply to both employers that buy health insurance to cover their workers and those that pay claims on their own. There is no way to know how many employers will take advantage of the IRS allowing benefits changes, but if you have questions for your company it never hurts to ask. Jay Savan of human resources consultancy Mercer says if you find yourself “economically strapped and [your] finances have changed…[you] may want to approach [your] employer and see if they’re planning to adopt any of these changes.”

IRS Allows Benefits Changes

So what does all this mean? If you still have employer-sponsored coverage amid the pandemic, it could mean you can opt for a cheaper plan than the one you started out with when your hours and income were steady. Although this will not entirely fix the issue of the lack of coverage many people currently face, here are some frequently asked questions from people who are still receiving benefits.

Can I switch to a cheaper plan simply to put money away during these uncertain times?

The answer is yes, if your company has chosen to accept these new guidelines. However, before you go trying to save money, you may want to consider that switching plans mid-year may mean having to pay down your deductible again and working toward reaching your out-of-pocket spending limit for the year. Katie Amin of Groom Law Group in D.C. says that some employer plans “would credit you under the new option if you switched plans” but that’s not necessarily guaranteed.

If my deductible is high, can I switch to a plan with more coverage in case I get COVID-19?

The IRS allows this, but experts are saying due to “adverse selection” employers probably won’t. They worry that the people willing to pay more for health coverage are sicker and will have higher medical bills, information they do not necessarily have to disclose to their employer, and would then cost the plan even more. You employer will also weigh their financial options when deciding whether they should allow this special enrollment period, what would be the uptake and how much would it cost them. Further, assuming your employer permits it, if you haven’t had insurance through your employer in the past, you should be able to sign up during the special enrollment period.

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