The IRS has released four information letters in which it discusses the requirements for cafeteria plan benefits. It didn’t come to any startling conclusions, but the letters serve as a refresher course in cafeteria plan administration.
Note: Information letters are intended as private advice from the IRS to the requesting party. They may be used for informational purposes only; they may not be used or cited as precedent.
Health flexible spending accounts. The IRS addressed two health FSA rules: the substantiation requirement and the universal coverage requirement, which mandates that employees have access to the full FSA amount, even if that amount is less than their pretax deductions.
The IRS reiterated that employees must substantiate their expenses to their FSAs by providing enough details to allow the FSA administrator to verify that the service or product was a qualifying medical expense. Employees must also certify th...(register to read more)