papogi

If that is the case, then the primary thing that can be changed during "open enrollment" would only be FSA elections. Again, even though Section 125 requires annual elections, an employer's desire not to have open enrollment overides this, and employee's can't add or remove dependents from their health coverage? So the only annual elections would really be FSAs in this case. I've combed what I can in the IRC, and can't find anything convincing enough to prevent confusion. Sandra, do you have anything you can cite?

Honestly, I'm not sure of their reason. I can guess that the employer did not always operate under Section 125. Also, at one point they were probably fully-insured, purchasing benefits from a traditional insurer. Somewhere along the line, they must have been convinced, perhaps by a broker, that not having open enrollment would limit adverse selection. They are now a self funded employer, and in that transition, might have adopted the flex approach as well. The lack of an open enrollment might be a leftover provision from years ago. My thinking is that their flex plan forces them to have open enrollment...

Assume that an employer does not have an open enrollment period, but that they do operate under a Section 125 flex plan. Since flex plans have the 12 month rule and require annual elections, does this overide the employer's desire not to have open enrollment, and basically force them to adopt an annual open enrollment coinciding with the flex plan's plan year?