In December 2012, the IRS issued proposed regulations that included a transition rule for elections made under a cafeteria plan with a non-calendar year plan year. Under this rule, an applicable large employer could amend its cafeteria plan to permit mid-year election changes corresponding with health care reform developments like the individual mandate and availability of the Exchanges.
On Oct. 31, the IRS released Notice 2013-71, which clarified that the relief is available to any employer with a cafeteria plan that has a non-calendar plan year beginning in 2013, whether or not the employer is an applicable large employer or applicable large employer member. The clarifications apply beginning on or after Dec. 28, 2012 (the date on which the proposed regulations were issued).
The Notice also states that any cafeteria plan amendment adopted under this transition rule may be more restrictive than the amendments described in the rule, but may not be less restrictive.