Cafeteria Plan

[Guest JFBEARB]

If a divorce decree indicates that the father is to cover the children with medical insurance and a later court orders that the mother cover the children with medical coverage, does this constitute a "change of status" so the mother's cafeteria plan can allow for the change:

[papogi]

The IRS considers this a status change, but check your flex plan doc to see if it lists this as a possible status change. Remember that flex plans are not required to observe any status changes if they wish, although most do. The court decree requires that the mother provide medical coverage, although it can't require that the mother provide it with pre-tax payroll deductions. If your flex plan does not recognize "judgments, decrees, or orders", then the child can only be added via post-tax payroll deductions. The mom can definitely add the child, the question is in what manner the payroll deductions will be taken.