SCHIP Reauthorization act of 2009

[Mary C]

Current regulations do not allow employees to cancel dependent coverage paid for on a pre-tax basis if the child becomes enrolled in a state sponsored SCHIP program. However, the new SCHIP Reauthorization Act of 2009 allows employees and dependents 60 days to request to enroll in an employer's group health care plan due to becoming eligible for premium assistance under a Medicaid or a SCHIP program. Does anyone know if the new regs also allow employees to drop pre-tax coverage to enroll dependents in a SCHIP program?

[Guest Benny Guy]

Current regulations do not allow employees to cancel dependent coverage paid for on a pre-tax basis if the child becomes enrolled in a state sponsored SCHIP program. However, the new SCHIP Reauthorization Act of 2009 allows employees and dependents 60 days to request to enroll in an employer's group health care plan due to becoming eligible for premium assistance under a Medicaid or a SCHIP program. Does anyone know if the new regs also allow employees to drop pre-tax coverage to enroll dependents in a SCHIP program?

For a premium only plan, yes, for an FSA DFSA, the answer appears to be no.

Make sure your plan document allows for this. Employer plan CAN add this.

Note the source for my interpretation is 1.125-4(e) & 1.125-4(f)