Cafeteria Plan - insurance premiums ?

[Spencer]

We have an employee who used to be full time and qualified for and took our employer sponsored group health, dental and vision insurance.  Those premiums were run through the cafeteria plan as pre-tax.   He is now part time and no longer qualifies for our employer-sponsored insurance.  He wants to know if we can run his outside individual insurance premiums through the plan. 

We only have one other part time employee.  She does not qualify for our group insurance either, but she is covered under her spouse's plan and has no interest in additional insurance. 

Can we do this?  how do we do this?   

[leevena]

No, individual medical premiums cannot be run through a 125 plan.  Also, keep in mind part-timers probably do not qualify as an eligible employee anyway.

[Luke Bailey]

You might be able to do an ICHRA.

[Brady]

While the new rules appear to allow a 125 plan to be used in conjunction with an ICHRA, unfortunately, I'm not sure an ICHRA would work in this specific case since it sounds like there is only one PT employee and FTEs are still offered traditional group health coverage. The new regulations appear to require a minimum class size for some classes including FT & PT when traditional coverage is offered to an applicable class. Since the minimum number of employees in the class (that must be offered) starts at 10, a class size of 1 would not work. Interested if anyone has a different take.

The other caveat is that if this employer happened to have 10 PTEs in the PT class, the employees would only be able to use the 125 for off-exchange plans. The 125 cannot be used for on-exchange plans.

Also interested if any companies are considering offering an ICHRA in 2020 or 2021.

[leevena]

I agree with Brady, doubt if it would work in this situation.

[BreakfastForDinner]

You could amend the plan so that part-time employees are eligible for employer-sponsored insurance. 

[Healthology]

Yes you most certainly can do this under the Cafeteria Plan with NESP.