---
title: New Guidance for Section 125 Mid-Year Election Change Rules
description: The IRS has relaxed mid-year election change rules for fully insured and self-insured employer sponsored health coverage, FSAs, and DCAPs for 2020.
---

[Employee Benefit News for School, City and County Employers ](https://blog.nisbenefits.com)

# [New Guidance for Section 125 Mid-Year Election Change Rules](https://blog.nisbenefits.com/new-guidance-section-125-mid-year-election-change-rules)

 Written by [Mike Strobl](https://blog.nisbenefits.com/author/mike-strobl) | May 18, 2020 3:23:17 PM

*1.5 minute read*

The IRS has relaxed mid-year election change rules for fully insured and self-insured employer sponsored health coverage, FSAs, and DCAPs for 2020. The changes are designed to allow employers to respond to changes in employee needs because of the COVID-19 pandemic.

For a health FSA or DCAP, participants can revoke their elections, increase or decrease existing elections, or make new elections.

For employer-sponsored health coverage, a Section 125 cafeteria plan may permit an employee to:

- Revoke an existing election if the employee is or will be enrolled in other health coverage
- Make a new election if the employee previously declined coverage
- Revoke an existing election and enroll in different health coverage sponsored by the employer

A plan may permit any of the election changes described in the [Notice 2020-29](https://www.irs.gov/pub/irs-drop/n-20-29.pdf), regardless of whether they satisfy existing mid-year election change rules.

Employers using this relief may determine the extent to which such changes are permitted and applied. For changes implemented, the employer must adopt a plan amendment by December 31, 2021. The amendment may be retroactive to January 1, 2020. Employees must also be notified of these changes.

[Download the bulletin](https://blog.nisbenefits.com/hubfs/Blog%20-%20supporting%20documents/bulletin%20-%20New%20COVID-19%20Guidance%20for%20Section%20125%20Mid-year%20Election%20Change%20Rules.pdf) for more details.

 

**Additional Resource**

[FAQs Medical Savings Accounts](https://blog.nisbenefits.com/hubfs/assets/faqs-how-covid-19-may-impact-your-medical-savings-accounts.pdf)

*This blog is intended to be a compilation of information and resources pulled from federal, state and local agencies. This is not intended to be legal advice. For up to the minute information and guidance on COVID-19, please follow the guidelines of the Centers for Disease Control and Prevention (CDC) and your local health organizations.*

 

[View full post](https://blog.nisbenefits.com/new-guidance-section-125-mid-year-election-change-rules)

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