Cafeteria plan for Dental Insurance

[Belgarath]

Employer has a group health plan, and pays 100% of the premium. No employee contribution at all.

Employer wants to establish a dental plan, voluntary participation, where employees would pay 100% of the dental insurance premium. Apparently, no coordination between benefits paid under the dental plan and any dental benefits that might be available under the health plan. But I don't KNOW that.

Eligibility for the dental plan would be if you are eligible for the health plan. Not eligible for health plan, not eligible for dental plan.

Is there any reason why the dental insurance can't be offered pre-tax through a cafeteria plan? Does that fact that eligibility is based upon eligibility for the health plan make any difference?

[Flyboyjohn]

Cafeteria plan should work fine and tying eligiblity to group medical shouldn't matter. In fact, you want to do everything possible to establish that this is an EMPLOYER group dental plan and not an "employee-pay-all" payroll accomodation which of course would not be eligible for pre-tax treatment.

[QDROphile]

While there are certainly issues with funding individul policies through a cafeteria plan, you seem to be saying it is precluded. What has happened to cause that conclusion?

[Bill Presson]

While there are certainly issues with funding individul policies through a cafeteria plan, you seem to be saying it is precluded. What has happened to cause that conclusion?

I know I read the Technical Release 2013-03 last fall as eliminating that option.

[QDROphile]

Are you referring to Q&A 12? It covers only policies obtained through an exchange.

[Bill Presson]

Are you referring to Q&A 12? It covers only policies obtained through an exchange.

Most people I rely on to help me interpret these kinds of things felt it eliminated all individual coverage through a cafeteria plan.

http://www.groom.com/media/publication/1304_Individual_Health_Policies.pdf

[masteff]

http://www.groom.com/media/publication/1304_Individual_Health_Policies.pdf

Page 5 of that document talks about "excepted benefits". Certain dental plans qualify as excepted benefits. It seems to me from a cursory review that what Belgarath proposes would be an excepted benefit and therefore permissible under an FSA; but it was only cursory so I'd gladly let someone w/ better info on the topic of excepted benefits to provide a better answer.

See page 6 here: http://www.ftwilliam.com/Docs/10_24_13%20Q+As.pdf "In addition, benefits provided under a health flexible spending arrangement are excepted benefits if they satisfy the requirements of paragraph ©(3)(v) of this section."

[QDROphile]

The dental benefits may well be excepted benefits, but an FSA can never be used for payment of premiums. Payment for dental coverage (premiums) would have to be through another feature of the cafeteria plan (some refer to it as "premium only")

[masteff]

My bad - I added an element of it being an FSA - Belgarath's original post does say cafeteria plan.