court order saying employee is not responsable for dependent care

[Guest kimb]

An employee wants to stop his dependent care election due to a court order he received last week. We're asking for a copy of the order for our records and he does not want to provide us with one.

1) can he stop his D. C. election at this time for this reason?

2) if so, what do we need from him to verify this change? will his signed statement be enough?

A quick response would be appreciated because he wants this to be effective before his next paycheck.

Thanks.

[oriecat]

The 125 regs on changes (1.125-4) include judgment, decree or order as a qualifying event, but only in regards to health coverage. It doesn't mention anything about DCAP coverage. I would say it is probably not an event that would allow him to change his coverage, but I wouldn't be surprised if someone has additional information...

[Guest b2kates]

In addition, no change should be permitted on the verbal say of the participant. No copy of order- no change permitted.

[jsb]

How has dependent care care expenses allowed this employee to work? (With a court order, I'm assuming there's a divorce going on.) Is the dependent in his primary custody? Short of transferring custody to the other parent, how could any court order affect the employee's need for dependent care?

You may find that there is no eligible dependent that allows him to participate in the plan in the first place. If that is the scenario, and you are inclined to consider his enrollment in error, you could perhaps make an administrative correction back to the start of your plan year. As an error correction, not prospective only, but back to when the "error" was made.