What is considered a "significant" increase in premiums to a

[Guest Vicki White]

What percentage increase would be considered "significant" to allow for a change in a cafeteria plan? The Plan Document states only that a change can be made if there is a signficant change in premium but does not give any guidelines as to what amount qualifies as significant. Would a 10 - 12% increase be considered significant?

[SLuskin]

The IRS has been very careful not to define significant. I think that it depends on many factors. If you are dealing with primarily minimum wage earners, significant could be $10 per week. If you are dealing with a fancy law firm where everyone makes good money, $10 a week is not. Also, the employer would have to offer other similar coverage in order for the employee to revoke that election and prospectively elect other similar coverage.