Change in Employer Contribution Allowed?

[Guest Sara H]

Our Health Plan runs 10/1-9/30 and our flex plan runs 1/1-12/31. We have just switched our Health Insurance Carrier for the plan year beginning 10/1/05. I have elected to switch to my spouse's employer sponsored plan effective 10/1/05. My employer provides a flex credit to employees - one amount if you are on the plan (because the employer pays the single premium) and a higher amount if you are not on the plan. For the period 10/1/05 - 12/31/05, can my employer credit increase since I am electing off of our plan? I am being told that it cannot because change in coverage is not a change in status. I understand that I cannot change my own pre-tax election, but I was thinking that a change in an employer credit would be allowd. Any thoughts?

Thanks!

[papogi]

This appears to be something that should be addressed in the plan document, and might be in a section that deals with prorating employer contributions based on mid-year hires or changes in status. As long as the document is not contrary, the employer has every right not to increase the employer contribution for the last 3 months of 2005 in this case. However, I know that some employers do have a policy in place that would allow for an increased employer contribution in your example.