Mid-Year Election Change

[PhilB]

Does a change in an employee's spouse's work schecule (FT to PT) qualify as a status change such that the employee can now enroll mid year in the DCSA? The spouse was NOT in a DCSA through her employer and is not going to PT status due to school, health, or to search for another job. In fact, the stated reason is so the spouse can spend more time with her children. Nevertheless, the employee now wants to use this event as a reason to join the DCSA.

The regulations I could find on this topic through EBIA, though not exhaustive, indicate that a change could be allowed to an existing account if the change in a spouse's work schedule necessitates a change in outside child care required. Again, this is not the case in this situation. I have not found anything that would seem to allow the employee to enroll in the DCSA when his spouse moves from a FT to PT status. Any opinions?

[SLuskin]

I agree. I would not allow enrollment in the daycare account. The desired election change has to be consistent with and "on account of" the status change which occurred.

I could argue the other way - if the employee had elected dependent daycare initially, and then the spouse changed from full time to part time, I would permit the employee to drop the daycare election if the reduced hours of the spouse meant that the child no longer needed outside daycare.

[oriecat]

I agree too. The desired change in the DCAP is not consistent with the status change and a midyear change should not be warranted.

[jsb]

If the spouse previously worked full time on a different shift (say night shift), and then switched to part-time day shift (or other same shift as the employee), DCSA enrollment may be OK as this might create an actual need for daycare. (Note: NEED daycare because both parents now working on same shift, notwithstanding whether or not they previously utilized daycare as a convenience.)

On the facts presented, however, going PT in order to spend moe time with the kids IS NOT consistent with the requested change to begin DCSA participation. We would deny this mid-year enrollment request.