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How the IRS' new Section 125 rules increase the appeal of flex plans:

  • Allows employees to be reimbursed from FSAs for orthodontia bills before services are performed.

  • Allows reimbursement of dependent care expenses from FSAs after employees terminate employment.

  • Gives new employees more time to make flexible benefit plan choices.

  • Permits employees to pay COBRA premiums with pretax contributions.

  • Allows employees to use pretax contributions to buy coverage in the individual market or other markets.