After-tax premiums - changing elections

[Guest AEA]

A plan allows an employee to elect between pre-tax and after-tax premium payments for health and dental insurance. The plan has adopted the change-in-status rules of 1.125-4.

The employer wants to know if the employees who elect after-tax payment can change their elections at any time or whether they must follow the change-in-status rules. Realizing that the plan document may need to be amended, can the after-tax employees ignore the change-in-status rules? The Regulation only says "elections" and does not differentiate between pre-tax and after-tax.

Thanks!

[SLuskin]

If a person is paying the premium after tax, it is because he did not want to be bound by the change in status rules. The only restrictions would be those imposed by the health plan.