When a plan allows premiums to be paid on a pre-tax basis, restrictions on when changes can be made usually apply. Commonly, an employee’s election stays in effect for the entire plan year and changes are not permitted, except during annual open enrollment. However there are exceptions, at any time throughout the year, an employee may make changes to coverage within 31 days of a qualified change in status that include (but are not limited to):
- Change in your legal marital status (e.g. marriage, legal separation, divorce, or death of your spouse)
- Change in your number of tax dependents
- Birth of a child or date you adopt a child, or placement for adoption
- Death of a dependent
- Change in your dependent’s eligibility (for example, your child reaches age 13 where he/she is no longer eligible under a DCFSA)
- Change in child care/elder care provider or cost or coverage, such as a significant cost increase charged by your current daycare provider, or a change in your daycare provider. This applies to a DCFSA only. It does NOT apply to a HCFSA or LEX HCFSA.
- Change in employment status (for employee, spouse, or employee’s dependent) that affects eligibility for health insurance benefits
- A court order, such as a QMCSO or NMSN, that mandates coverage for an eligible dependent child.
These changes must coincide with the status changes mentioned above. The Plan document should define what changes in status are recognized, and should reflect any limitations applied.
