Election Change - Improvement of Benefit Package Option

[Guest Mel Kiper Jr.]

A national company sponsors a vision plan. In one rural location, there is no local vision plan provider (have to drive 30 miles away). The Company contacts the vision plan provider and gets them to add a local eye doc. Can the company now allow employees in that rural location to elect the vision plan with pre-tax $$$ without running afoul of the 1.125-4? In other words, do you think that this qualifies as a significant improvement to a benefit package option under 1.125-4(f)(3)(iii). Does the IRS answer calls on this?

[Guest morris]

In my opinion yes--this is a significant improvement and should allow a midyear election.

[GBurns]

This is a significant change and would allow an election change, if the plan documents allow it.

I like to run things like this through the Tool at www.changeofstatus.com

You should also look at the examples given in thr Regulations. I recall 1 that was similar.