|
|
|
| Issue: |
An employee has contacted you because she wants to modify her cafeteria plan elections outside your company’s open enrollment period. When can employees revoke an election or make a new election to a cafeteria plan?
|
 |
|
|
Answer: |
An employee can revoke an election or make a new election to a cafeteria plan only under certain conditions. These conditions include the following:
- There is a change in the employee’s status;
- The employee is making a new election that corresponds with the special enrollment rights provided under HIPAA;
- There is a judgment, decree, or order requiring coverage for a dependent;
- The employee, the employee’s spouse, or the employee’s dependent becomes entitled or ceases to be entitled to Medicare or Medicaid;
- There is a significant change in the cost or coverage of health benefits; or
- The employee is on leave pursuant to the Family and Medical Leave Act.
Change in status. Throughout the course of the year, you will have employees who marry, or who may divorce, have a child or adopt one, or become disabled. All of these events are changes in status that can impact benefits.
Events constituting a change in status include:
- Legal marital status—marriage, death of spouse, divorce, separation, or annulment;
- Number of dependents—birth, adoption, placement for adoption, or death of a dependent;
- Employment status—start or termination of employment, strike or lockout, commencement of or return from an unpaid leave of absence or change in worksite that changes the employment status of the employee, spouse, or dependent, or a change in employment status that results in an employee, spouse, or dependent becoming (or ceasing to be) eligible under a plan; and
- Residence—a change in place of residence or work of the employee, spouse, or dependent.
When there is a status change, a plan may permit the employee to revoke or modify his or her election only if a change of status occurs that affects eligibility for coverage and the election change corresponds with the effect on eligibility.
Source: CCH HR How-To Flexible Benefit Plans |
|
|
