Adding Benefits to 125 plan after plan year has begun

[Guest bruss]

We have a 125 plan, plan year 1/1/04-12/31/04. We would like to add dependent care benefit. Can we add now and enroll for that additional benefit? Or, would we need to establish a second 125 plan with a different plan year?

[Guest gjdavid]

If you do a seperate plan you can have a short first plan year. With forfietures and other DC FSA issues, getting out of sink with the rest of your benefits will haunt you for years to come. Having said all that, I do believe you can add the additional benefit to your exisiting plan. IRSC 125 is pretty vauge on the point but I think there is a Rev. Ruling that coveres this. Try searching there.

[Kirk Maldonado]

Try searching the message boards first. I think that Harry Beker said that it could be done.

[g8r]

I'm sure Harry has said it can be done. You can add the new benefit and have an initial short coverage period for the benefit, but participants can't change any existing elections just b/c of the addition of the DCAP.