Offering benefits to employees on a pre-tax basis is only allowed under a Section 125 plan, and those rules limit when employees may change their annual elections.
In this webinar, NFP’s Benefits Compliance team provided a brief refresher on the midyear election change event rules — both mandatory and permissible. They also discussed common employer pitfalls and practical implications of administering qualifying events.
Agenda
Midyear Election Changes
Cafeteria Plans Generally
Overview of Permissible Election Changes
- Election Chage Events
- Change in status
- Change in cost or coverage
- HIPAA Special Enrollment Rights
- Court orders and other mandates
- Consistency Rule
- “On account of and corresponds with” the event’s effect on coverage
- Examples
- What to do when stuff happens
Key Takeaways
Employer Considerations
Elections are fixed and certain; established prior to plan year.
- Employees should carefully consider benefit offerings during open enrollment.
- Ask for directions.
Permissible election changes are an exception to the general rule.
Election changes are permitted under specific circumstances.
- Specific event + consistency = permissible election change.
Mistakes happen.
- Employer should establish strategy for handling mistakes.
- Use “defensive driving.”
A written plan document is required.
- Should encompass election change provisions as well as other cafeteria plan requirements.
- This is your roadmap.
NFP Resources
For further information about midyear election changes, please ask your broker or consultant for a copy of the NFP publication Midyear Election Change Events: A Guide and Matrix for Employers.