Annual Enrollment

[Guest kgemind]

Is loss/gain of coverage thru spouse's employer a qualifying event for electing/dropping benefits during any time of the plan year?

Reading the regulations effective 01-10-01, it seems it is.

Are there any special circumsatances I need to be aware of?

[papogi]

The rules in 125-4 concerning changing elections outline all possible changes to Cafeteria Plan elections. Not all 125 plans adopt all the possible events which can give rise to an election change. In addition, status changes do not give an employee free reign to change elections. Consistency rules must still be adhered to. Check this out for a good summary of what is allowed under Section 125 given the particular change at hand:

http://www.125plan.com/COS_Matrix.PDF

Also, keep in mind that these 125 rules do not supercede the rules of the underlying plans. For instance, a married couple is employed by two employers, the husband with a 1/1 flex year, the wife with a 7/1 flex year. Assume the husband wants to add his spouse to his plan. She drops her coverage on 7/1. A voluntary drop such as this is not a HIPAA event, so special enrollment provisions won't help. Section 125 will allow the husband to add his spouse with pre-tax dollars, assuming the underlying plan allows the spouse on mid-year with no HIPAA event. You have to look at each particular situation, and check both the underlying plan, as well as what is allowed under 125.

Please post again with specifics if you want.