ENHANCING A PLAN IN MID-YEAR

[Guest jfgc]

Our company offers employer paid medical, dental, std, ltd, and group life and dependent medical and dental is offered on a pre-tax payroll deduction. Our renewal was July 1 and we wanted to make some changes but due to TPA delays were not able to. Can we change the plan before July 1 next year to a cafeteria plan to include vision and supplemental life? We were thinking of offering "benefit dollars" and any benefit dollars not spent would automatically go into the flexible spending account we offer which includes unreimbursed medical and dependent care. In setting the benefit dollars we were also considering using the cost per employee from last year for fixed costs and claims. Any suggestions would be appreciated.

[Guest jlcowden]

Presuming you do not now have a flex plan the answer is an uneqivical yes!!!! You may want the initial plan year to be a short year. Do you want the plan year to be based on contract or calender yaer?

If you already have a flex plan you can still accomplish what I believe is yor aim..but there will be a bit of footwork involved.

Let me know if you have other related questions.

Jere Cowden

[Guest jfgc]

We have a Flexible Spending Account for unreimbursed medical and dependent care but it runs on a calendar year and has low participation. The other coverages are on a July 1 renewal date.

[Guest Lee Ann Jenkins]

Yes, Yes, Yes - Please do jump in and offer a full cafeteria plan. It sounds like you're ready. If there's a significant reason to stay with a 7-1 anniversary date, by all means do, but if you can, I'd suggest that you have a short 1st plan year from 7-1-2001 through 12-31-01. This would give your employees an opportunity to "wade" into the plan for only 6 months. Please let me know if you'd like any help. LAJ