Premium Only Plan

[Guest acornwell]

A company had open enrollment in November as normal for a 1/1 plan year. This month they decided they want to change the plan year to 5/1, because they are adding some new companies to the fold and need to bring them in to the plan. Can they change this mid-year, without announcing during open enrollment? I understand you can do a short plan year, but I thought it had to be announced.

Can participants make election changes? Add spouse etc.?

[LRDG]

Early termination of a POP Plan, (Premium Only Plan), effective 04/31/09? versus 12/31/09, is possible. If the plan includes FSAs, (Flexible Spending Accounts), early termination is more complicated.

An announcement that the POP plan will be terminated effective 04/31/09? with a new effective date and 12 month plan year beginning 05/01/09 through 04/31/10. A brief explanation that the new plan year is necessary because of newely aquiried subsidiary companies has made the change necessary.

Include information about the new benefits that will be offered for the 05/01/09-04/31/10 plan year, including necessary info about benefits you would for Open Enrollment.

Ammending the existing plan might be possible, but because in addition to plan year you will be offering new benefit options and new subsidiary companies and participans, it's cleaner to terminate. Unless there are other compelling reasons for amending the existing plan, termination might be the best option.

If you choose open enrollment for a new plan year you would want to allow new coverage of spouses, and any election change you would normaly allow for a new plan and open enrollment.

edited to add: The plan document will need to be amended to reflect plan year changes, new benefit options and new corp., entities.

[Guest acornwell]

Thank you so much for your help. I've done quite a bit of research on my own, but this validates what I've found.

Early termination of a POP Plan, (Premium Only Plan), effective 04/31/09? versus 12/31/09, is possible. If the plan includes FSAs, (Flexible Spending Accounts), early termination is more complicated.

An announcement that the POP plan will be terminated effective 04/31/09? with a new effective date and 12 month plan year beginning 05/01/09 through 04/31/10. A brief explanation that the new plan year is necessary because of newely aquiried subsidiary companies has made the change necessary.

Include information about the new benefits that will be offered for the 05/01/09-04/31/10 plan year, including necessary info about benefits you would for Open Enrollment.

Ammending the existing plan might be possible, but because in addition to plan year you will be offering new benefit options and new subsidiary companies and participans, it's cleaner to terminate. Unless there are other compelling reasons for amending the existing plan, termination might be the best option.

If you choose open enrollment for a new plan year you would want to allow new coverage of spouses, and any election change you would normaly allow for a new plan and open enrollment.

edited to add: The plan document will need to be amended to reflect plan year changes, new benefit options and new corp., entities.