Terry Connerton

I would look to the language in the Plan document regarding distributions to minor beneficiaries. If it is to a person who is a parent or guardian of the minor, then it should be distributed to the parent or guardian for the benefit of the Beneficiary. The Plan document controls.

There was no fraud. If the form was incorrect, the employee was merely trying to correct it. The record keeper should have rejected it and sent the employee another form with the correct information for the requested distribution. I find it hard to believe that the employer terminated her for this reason. If there is something I'm missing in the facts, let me know. On the employment side, an employer can normally fire someone with or without a reason and unless the reason violates federal or state law. This does not sound like an ERISA 510 violation.

Since the employees are paying their premiums pre-tax, there should be a premium only cafeteria plan and the rules applicable to employees on an approved unpaid leave of absence should be described in the Plan document. There are several options employers may provide to employees to pay their share of the premiums while on an approved unpaid leave of absence which are covered in IRS regulations.