Open enrollment every twelve months required?

[Guest ToddieBear]

Is there any requirement that there has to be an annual open enrollment period?

I guess this relates to the requirement that the open enrollment period be prior to the period of coverage. Does it say a period of coverage couldn't be more than a year in length? E.g., two years, three years?

Thanks!

[papogi]

The underlying health plan is not required to have an open enrollment. Since 125 plans (the funding mechanism to pay for the underlying health plan with pre-tax dollars) are required to have 12 month plan years, except for intitial short plan years, then you will have a section 125 annual enrollment. That will allow participants to make new FSA elections each year, as well as allow participants to switch from pre-tax to post-tax, thereby dropping out of the 125 plan and allowing them to drop the underlying health plan under the cessation of required contributions language. Or, in theory anyway, they could continue on the health plan with post-tax contributions. As for coming on the health plan, the rules under HIPAA special enrollment are the minimum necessary, so no open enrollment is required for the underlying health plan.

[Christine Roberts]

I believe a short plan year can also occur when a cafeteria plan year has been changed for legitimate business purposes; i.e., not just to allow a change of election before 12 months has elapsed.