Employees on Disability Unable to Have Open Enrollment Changes Made Effective While on Disability

[Guest rocnrols2]

Company X sponsors a 125 plan for its active employees. Employees get to choose different options among medical, dental, life insurance, LTD, a medical flexible spending account and a dependent care flexible spending account. Employees who become disabled receive short-term disability for the first six months and then go onto LTD. Disabled employee continue to participate in the plan until they have two consecutive calendar years of disability, then they go onto the retiree benefit plan.

Company X's 125 plan provides that if an employee is on disability, while s/he will be provided a ballot to elect optional coverages, this election will not become effective until the employee returns to active status. Assuming that the FSAs do not continue during disability. Are there any problems under the 125 plan rules with this approach?