Plan Amendment to change part. and term. dates

[Guest tintree73]

Can we do this.

We have a full-flex benefit plan (cafeteria - flex-credits) for health and dental insurance, health FSA and Dependent care FSA.

Right now we operate the plan so that upon a change in employment status (change-in-status), the employee may modify his/her election consistent with that change.

Here's the question, the CEO now wants to modify the plan so that the insurance premiums will remain paid on the employee until the end of the month regardless of when the change in status happens. If the employee terminates late in the month (last week) this is not much of an issue (but could be). However, if the employee terminates employment during the first week of the month - he/she would receive coverage until the end of the month (under the CEO's idea), but how would we work out the flex-credit issues? Would we have to have the employer pay the additional premium or could we limit the change-in-status until after the end of the month - or is there some other option that isn't coming to me right now?

[jsb]

In our plan, coverage stops at the end of the month in which you terminate. Benefits are monthly, and changes are only prospective. So if you work 1 day in the month, you have coverage. For this you recieve 100% of any monthly employer contribution (including left over cash) and you pay 100% of any employee contribution from your final paycheck(s). Medical and Dependent Care Reimbursement account deductions stop when payroll stops.