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The Notice generally allows employees to make mid-year changes to their cafeteria plan elections for 2013 in order to pay for health coverage for their same-sex spouses on a pre-tax basis (provided their employer's health plan extends coverage to same-sex spouses). Similarly, employers that extend health coverage to same-sex spouses through a cafeteria plan are required to treat that coverage on a pre-tax basis in the circumstances outlined in the Notice.
The Notice also clarifies that health FSAs may be used to reimburse expenses incurred by same-sex spouses, and that FSA and HSA limits applicable to married individuals will be applied to same-sex couples.
Note that employers that do not extend health coverage to same-sex spouses generally are not affected by the Notice. Also, the Notice applies to federal tax treatment, so employers will need to consult applicable state tax laws to determine if state taxes are treated the same way.
Linked below, you'll find a BB&T compliance update that details implementation steps for employers:
IRS Guidance on Cafeteria Plan Elections and Other Benefits for Same-Sex Spouses
