Elections on rehire

[Guest phs]

Can a plan allow an employee who is rehired in the same plan year to change the elections he or she had in place prior to termination? The proposed regs indicate that this is permissible for health and life benefits but not for dependent care spending accounts.

[Guest Sheryl Kopsing]

My understanding is that if the employee is rehired less than 30 days from the date of termination that they need to come back in with the same election they had before the termination. If they come back after the 30 day mark, they need to satisfy the eligibility requirements all over again before enrollment to the plan.

[Guest phs]

Assuming that the cafeteria plan and the welfare plans offered through the cafeteria plans are available on date of hire, do you think that an employee who is rehired say 6 month later (but in the same plan year) can make new elections? I guess other than to the dependent care spending account.

[Guest Carmel]

In my reading of the IRS regulations for rehired employees, employees who leave in a plan year are revoking their elections and if they return in the same year cannot elect any Sec 125 benefits for the rest of the plan year. Does anyone else who has read the regs and IRS Q & A's see it this way?