CHANGE-IN-STATUS EVENTS | ||
DESCRIPTION |
REQUIREMENTS |
TYPE OF BENEFITS |
The IRS considers the following events to be changes in status that may permit a midyear election change:
Change in employee’s legal marital status (marriage, death of spouse, divorce, legal separation and annulment)
Change in number of dependents (birth, death, adoption and placement for adoption)
Change in employment status of employee, employee’s spouse or employee’s dependent (for example, a termination or commencement of employment, a strike or lockout, commencement of or return from an unpaid leave of absence or a change in worksite)
A dependent satisfies or ceases to satisfy dependent eligibility | Employee’s requested election change must be on account of and correspond with the change in status event. In general, no election change is allowed unless the event affects eligibility for the coverage. This includes a change in status event that results in an increase or decrease in the number of an employee’s family members or dependents who may benefit from the coverage. An election change for dependent care assistance or adoption assistance satisfies the consistency requirement if it is on account of and corresponds with a change in status that affects dependent care or adoption expenses. If the change in status is the employee's divorce, annulment or legal separation from a spouse, the death of a spouse or dependent, or a dependent ceasing to satisfy the eligibility requirements for coverage, an employee's election to cancel accident or health insurance coverage for any individual other than the spouse involved in the divorce, annulment or legal separation, the deceased spouse or dependent, or the dependent that ceased to satisfy the eligibility requirements for coverage, respectively, fails to correspond with that change in status.
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Applies to all qualified benefits, including health FSAs |
CHANGE-IN-STATUS EVENTS | ||
DESCRIPTION |
REQUIREMENTS |
TYPE OF BENEFITS |
requirements (including attainment of age, student status or any similar circumstance)
Change in place of residence of the employee, spouse or dependent
Commencement or termination of adoption proceedings, for purposes of adoption assistance benefits |
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COVERAGE CHANGES | ||
DESCRIPTION |
REQUIREMENTS |
TYPE OF BENEFITS |
Significant curtailment of coverage |
If an employee (or an employee’s spouse or dependent) has a significant curtailment of coverage under a plan during a period of coverage that is:
Not a loss of coverage (for example, there is a significant increase in the deductible, the copayment or the out-of-pocket maximum)—the plan may permit the employee to revoke his or her election for that coverage and elect coverage under another benefit package option providing similar coverage
A loss of coverage—the plan may permit the employee to revoke his or her election for that coverage and elect coverage under another benefit package option providing similar coverage or to drop coverage if no similar benefit package option is available.
A “loss of coverage” means a complete loss of coverage under the benefit package option (including the elimination of a benefits package option or an HMO ceasing to be available in the area where the individual resides). In addition, a cafeteria plan may treat the following as a loss of coverage:
A substantial decrease in the medical care providers available under the option;
A reduction in benefits for a specific type of medical condition for |
Applies to all qualified benefits, except health FSAs |
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COVERAGE CHANGES | ||
DESCRIPTION |
REQUIREMENTS |
TYPE OF BENEFITS |
| another employer) if:
The other cafeteria plan or qualified benefits plan allows an election change that is permissible under the IRS regulations; or
The other cafeteria plan has a different period of coverage. | FSAs |
Loss of health coverage sponsored by governmental or educational institution |
A cafeteria plan may permit an employee to make an election to add coverage under a cafeteria plan for the employee, spouse or dependent if the employee, spouse or dependent loses coverage under any group health coverage sponsored by a governmental or educational institution. This includes coverage under a state Children’s Health Insurance Program (CHIP). |
Applies to all qualified benefits, except health FSAs |
OTHER LAWS OR COURT ORDERS | ||
DESCRIPTION |
REQUIREMENTS |
TYPE OF BENEFITS |
HIPAA special enrollment rights |
A cafeteria plan may permit an employee to revoke an election for coverage during a period of coverage and make a new election that corresponds with the special enrollment rights provided under HIPAA.
This allows an employee who enrolls during a special enrollment period to elect to pay for the newly elected health plan coverage on a pre-tax basis. The election can include payment for retroactive coverage when the special enrollment right is triggered due to birth, adoption or placement for adoption. |
Group health plans that are subject to HIPAA’s portability rules |
In general, health FSAs are excepted benefits that are not subject to HIPAA’s portability rules. | ||
COBRA qualifying event (or similar |
A cafeteria plan may permit the employee to elect to increase payments under the employer’s cafeteria plan in order to pay for continuation coverage for which an employee, spouse or dependent has become eligible. |
Group health plans subject to COBRA, including health FSAs |
state law continuation coverage event) | ||
Judgments, decrees or orders (including QMCSOs)
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A cafeteria plan may change the employee’s election to provide coverage for a child if there is a judgment, decree or order resulting from a divorce, legal separation, annulment or change in legal custody (including a qualified medical child support order, or QMCSO) that |
Accident or health plan coverage, including health FSAs |
requires accident or health coverage for the employee’s child or for a foster child who is a dependent of the employee. | ||
A cafeteria plan may permit an employee to make an election change to cancel coverage for a child if the order requires the spouse, former | ||
OTHER LAWS OR COURT ORDERS | ||
DESCRIPTION |
REQUIREMENTS |
TYPE OF BENEFITS |
| spouse or other individual to provide coverage for the child and that coverage is, in fact, provided. |
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Entitlement to Medicare or Medicaid |
If an employee, spouse or dependent becomes entitled to coverage under Medicare or Medicaid, the cafeteria plan may permit the employee to cancel or reduce coverage of that employee, spouse or dependent under the accident or health plan.
Also, if an employee,spouse or dependent who had been entitled to Medicare or Medicaid loses eligibility for this coverage, the cafeteria plan may permit the employee to commence or increase coverage for that employee, spouse or dependent under the accident or health plan. |
Accident or health plan coverage, including health FSAs. |
FMLA leave |
An employee taking leave under the federal Family and Medical Leave Act (FMLA) may revoke an existing election of accident or health plan coverage and make another election for the remaining portion of the period of coverage as may be provided for under the FMLA. |
Accident or health plan coverage, including health FSAs. |
Changes in 401(k) Contributions |
A cafeteria plan may permit an employee to modify or revoke elections related to a 401(k) plan, in accordance with Code Sections 401(k) and (m). |
401(k) elections |
ACA CHANGES | ||
DESCRIPTION |
REQUIREMENTS |
TYPE OF BENEFITS |
Exchange enrollment |
A cafeteria plan may allow an employee to revoke an election of coverage under a group health plan if both of the following conditions are met:
The employee is eligible for special enrollment in an Exchange plan or the employee wants to enroll in an Exchange plan during the Exchange’s annual open enrollment period; and
The revocation of the election of coverage under the group health plan corresponds to the intended enrollment of the employee (and any related individuals who cease coverage due to the revocation) in an Exchange plan. The Exchange coverage must be effective beginning no later than the day immediately following the last day of the original coverage that is revoked.
A cafeteria plan may rely on the reasonable representation of an employee who has an enrollment opportunity for an Exchange plan, that he or she and related individuals have enrolled (or intend to enroll) in an Exchange plan for new coverage that is effective within the required time frame. |
Group health plans that provide minimum essential coverage |
Does not apply to health FSAs | ||
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ACA CHANGES | ||
DESCRIPTION |
REQUIREMENTS |
TYPE OF BENEFITS |
Reduction in hours of service |
A cafeteria plan may allow an employee to revoke an election of coverage under a group health plan if both of the following conditions are met:
An employee who was reasonably expected to average at least 30 hours of service per week has a change in employment status so that the employee will reasonably be expected to average less than 30 hours of service per week after the change (even if that reduction does not result in the employee ceasing to be eligible under the group health plan); and
The revocation of the election of coverage under the group health plan corresponds to the intended enrollment of the employee (and any related individuals who cease coverage due to the revocation) in another plan that provides minimum essential coverage. The new coverage must be effective no later than the first day of the second month after the month in which the original coverage is revoked.
A cafeteria plan may rely on an employee’s reasonable representation that he or she and related individuals have enrolled (or intend to enroll) in another plan that provides minimum essential coverage within the required time frame. |
Group health plans that provide minimum essential coverage |
Does not apply to health FSAs | ||
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