Sect.125 - Plan Year Change

[Guest sniffles]

We have received our renewal information for our self-funded health insurance plan.

We have a Section 125 Document. This document states it is effective Jan. 1, 2009. We also offer a flexible spending account (health & dependent care) and a dental plan. Our Flex & Dental Plans are both calendar year. Our Health Plan is 10/01 to 9/30. We would like to change our Health Plan to a Calendar Year so we can do Open Enrollment at one time for our benefits.

We are looking at a one time 15-month Plan Year (10/01/09 thru 12/31/2010) and then it would be run on a calendar year basis after that.

I don't believe we have to amend our Section 125 Plan because it only refers to the "Plan Year" with no specific mention of our current Healtn Insurance plan year. The Summary Plan Document has an Attachment A included which does have the beginning of the plan year (example: Health, 10/01) I believe we can just change this attachment with no problems.

Is there anything else I should be aware of before we change this?

Thanks for your help!

[J Simmons]

Although not yet final regulations with which compliance is required, you might want to take a look at the IRS' most recent guidance on plan years for cafeteria plans. Prop Treas Reg § 1.125-5(d). Shorter than 12 month plan years are mentioned, but not longer than 12 month plan years.