2023 IRS Cost of Living Adjustment Index Released
The IRS and other relevant agencies have released the 2023 indexed amounts for various employee benefits. This information comes a little late for employers who are in open enrollment but see our tips here.
What to do if open enrollment has started/finished:
-First review your plan document. If it automatically applies the increased limit, then you may need to give employees who elected the “old” maximum a chance to increase.
-If instead your plan says the limit is what was communicated during open enrollment, you may not need to allow any changes, although you may want to.
-You can allow changes before the plan year begins (but check your cafeteria plan document for any limitations).
-Consider how much time you need to load election changes into payroll.
-Once the plan year begins, elections are locked in.
To adjust elections automatically in the future:
-Make sure your cafeteria plan document automatically applies the updated IRS limit employees that elected the “old” maximum.
-Revise open enrollment materials to say that an election of the “old” maximum will be treated as an election for the maximum, as adjusted by the IRS.