After OE period ends, can employee void an election made during OE period but before first payroll deduction?

[Guest Jeff V]

I'm interested in any LAW guidance on this if anyone found any. I spent 15 minutes using the SEARCH function and came up empty (although I did read a lot of interesting stuff!)

Not interested in the "Check your plan document" kind of reply, but actual knowledge of (citation if possible) an IRS position or LAW.

Thanks.

[papogi]

Treas Reg 1.125-1 Q-15, first paragraph, addresses this. Elections must be made before the benefit is available. If the benefit becomes available on 1/1/04, then no change can be made after 1/1/04, even if the first payroll deduction has not been taken. If, however, your open enrollment period ends 12/1/03, and the benefits go into effect 1/1/04, then the IRS would not care if you allowed a change to the election during the month of December because it is still prior to the benefits becoming available. If that is the direction your question is going, then unfortunately the answer is what you don't want to hear: check the plan doc. The plan doc deals with open enrollment processes, and the IRS does not care about those details. If you wish to provide a way for employees to make changes in the month of December (continuing my example above), then you only need to do this on a non-discriminatory basis. Allow everyone a re-evaluation period. Again, it must be prior to the benefits becoming effective.

[Guest Jeff V]

Thanks, papogi.