Cafeteria Plan

[Guest PamM.M]

Our company requires a new election form each year for our cafeteria plan. If an employee does not turn in a new election form, can we continue to use the previous year's elections or assume no elections at all?

Thanks!

Pam

[Guest Stuartt]

What does the form and/or the plan document say?

[J Simmons]

If the existing election specifies, then the insurance coverages elected can automatically renew for the entirety of the new year in the absence of an election being submitted during the annual enrollment for that new year. If it does renew automatically, the employee may only make a change in the middle of the new year if he or she has a change of status under the regs.

As for the flex accounts (medical and day care) that the cafeteria plan may offer, the election does not renew automatically. Flex accounts are annual accounts. An employee who has flex accounts currently but does not elect them during the annual enrollment for the new year will not have flex accounts in the new year. To convey this concept to employees, many SPDs refer to them as 'annual flex accounts' and sign-up sheets refer to flex accounts by the year, such as '2007 medical flex account'. This, in a very simple way, conveys to the employee that the flex account ends at the end of the year.

[Guest PamM.M]

If the existing election specifies, then the insurance coverages elected can automatically renew for the entirety of the new year in the absence of an election being submitted during the annual enrollment for that new year. If it does renew automatically, the employee may only make a change in the middle of the new year if he or she has a change of status under the regs.

As for the flex accounts (medical and day care) that the cafeteria plan may offer, the election does not renew automatically. Flex accounts are annual accounts. An employee who has flex accounts currently but does not elect them during the annual enrollment for the new year will not have flex accounts in the new year. To convey this concept to employees, many SPDs refer to them as 'annual flex accounts' and sign-up sheets refer to flex accounts by the year, such as '2007 medical flex account'. This, in a very simple way, conveys to the employee that the flex account ends at the end of the year.