Leaderboard

Why not just ask THEM to provide citations for their assertions?

It depends on the provisions of the plan. There is the 5 year rule and the 1 year rule. The Plan must comply with one of the two rules but it can allow for the beneficiary to make an election or it can state the rule it will follow and not give the beneficiary discretion. So when in doubt read the terms of the Plan Document.

As they are "elective deferrals" I would assume they have a very low priority on the order in which they come out of person's paycheck. I have no legal basis for this conclusion but in practice it is the way I have seen them handled by nearly every payroll system I've come in contact with.

Elective deferrals are governed by contract -- the plan document, and most plan document are really lousy contracts. The appropriate order is determined by thoughtful consideration, another failure. Finally, cheap inflexible payroll systems and providers, by contract, can interfere with thoughtful efforts to achieve a desired goal. Payroll systems and providers are the bane of plan administrators and designers. Setting aside extraordinary compensation from the conversation, it makes sense to give priority to elected health coverage payments and nonelective health coverage payments will certainly get priority. But the payroll provider should not be the one to decide in an ideal world. And not matter what, the plan document should address sources of contributions as a separate matter from definition of compensation. Try to find a prototype provider that does.